Further to my earlier report, and the Earl J Weinreb NewsHole® comments, I would have had the government do the following at the first signs of financial distress:
One: Buy up at bargain prices all the unsold tract homes in bubble-infested areas, such as Arizona, California and Florida. This would not have been a bailout for the builders. They would have suffered losses.
Result: it would have dried up the major excess supply of real estate and stopped the ongoing, adverse psychology that kept reducing values of the rest of the nation’s perfectly good real estate that was not too overvalued. The cost would be relatively very low, compared to the many billions and even trillions we have expended.
Two: The federal government, through one or more of its agencies, could guarantee all the loans of its banks, the way the FDIC insures deposits. Fees would be charged the banks for the guaranty.
Result: No bailout funds from taxpayers, no phony stimulus funds which really amount to political slush funds. No poor psychology that makes banks wary of making loans to small business; thus more job creation.
Three: Corporations, such as those in the automobile industry, in financial trouble, could use the bankruptcy courts for an orderly means to reorganize debts.
Result: No bailouts for outrageous union contracts, which make it impossible for any corporation to compete domestically or internationally without taxpayer assistance. And without the U. S. becoming a state socialistic society comparable to Italy’s under Benito Mussolini.
There would be no multi-trillion dollar budget deficits that are confusing and scaring large and smaller, job-creating business owners. Everyone is afraid to hire, especially with looming taxation ahead.
By now the economy would be thriving again.
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