Usurper Barry Soetoro believes falling home prices are a problem. So does Carnegie Mellon professor Alan Meltzer. Both of them want to stop home prices from falling by “stimulating the economy.” In essence, they both want to make the problem worse.
The problem isn’t that home prices are falling. The problem was home prices were too high. People, instead of saving, were spending. Too much home buying caused home prices to rise, creating a bubble. Everyone was buying, no one was saving. Prices were rising.
The bubble has popped. That is a good thing. Too high home prices was a bad thing, makes housing unaffordable to more people. Falling prices is a good thing. Lower prices are the solution, not the problem.
What does Soetoro and Professor Meltzer want to do?
Stop home prices from falling by stimulating the economy. That’s like throwing gas on a fire to put the fire out. The government already threw gas on the fire with its Targeted Asset Relieve Program – TARP – bailout. Those banks that made mistakes by taking too many risks should have been allowed to fail. Now, the banks that didn’t take too many risks, along with the taxpayers, are being forced to pay for the mistakes of the greedy Wall Street banks. Fair? Hardly. It is not the role of government to intervene in the market when businesses make bad decisions. Those who make bad decisions should pay for their decisions.
Now, even though the $850 billion dollar TARP bailout didn’t work, what is government going to do? More of the same. Bigger is better. Even more intervention they say is needed, never admitting they made a mistake the first time around, and that is why the “stimulus package” isn’t working. The solution is not a second stimulus package. The solution is to let housing prices, through the free market, fall until they find their equilibrium level.
But that is not what we are going to get from the Marxist usurper in the White House. We are going to get more billions of borrowed money thrown at the problem causing the dollar to collapse, and causing the coming depression to be greater in both duration and depth. Hyperinflation is just around the corner to boot.
Hang on folks, it’s going to be a long rough sleigh ride to and along the bottom.
See article here: Home Price Declines Compound US Economic Decline