Wednesday, October 08, 2008

so, i do want to give credit where credit is due, and john mccain last night actually made some news with his proposal for the federal government to buy up $300bn worth of bad mortgages and renegotiate with the borrowers at their home's new, much lower value, basically eating the loss for them, so that people can stay in their homes.

i actually think that's a pretty good idea, and brought up something similar in a discussion with some friends that can be found at i think the money ought to come out of the bailout (ahem, i mean rescue) bill that was just passed (instead of being new spending), but i think it's a solid idea, and addresses at least part of the core problems of what wall street did to the american economy. if the mortgage market is stabilized, and the foreclosures slowed or stopped, it seems to me that those toxic collateralized debt obligations whose monetary obligations are freezing up the credit markets become less toxic, easier to value, and that once that value was established and everybody knows or at least has a better idea what's on the balance sheet, then maybe the credit markets thaw up some since banks will know what kind of cash on hand they'll need and can lend out the rest to other banks and businesses short-term, which is a major underpinning of american capitalism.

shit, even the state of california was running day-to-day operations on short-term loans. schwarzenegger just asked treasury for $7bn, after all.

i should also mention, fwiw, that i think that movement conservatives are going to eat john mccain alive for such a liberal, progressive policy proposal. i mean, i think it's a great idea, and might actually help some people that need help, but it definitely goes against everything the republican party stands for.

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