With the housing market sinking and causing panic about the American economy, Moody's Economy.com Chief Economist Mark Zandi thinks the time is right for the government to invest in the housing market.
Huh?
Zandi, who has been pessimistic about the housing market and sees no end to its woes in sight, at least until the end of the decade, thinks a government bailout is the right way to solve this problem and would actually bring in tax money.
"They're very difficult to tackle these - but I think they are coming forward with plans that eventually will have some benefit," Zandi said on CBS's March 14 "The Early Show." "But they do need to do more. I do think this is a very large problem, and it's going to require a big answer - probably taxpayer money at the end of the day and I think we're headed down that path."
But Zandi's logic would probably make some free market proponents cringe. He told "The Early Show" a taxpayer bailout is needed ... so that there is no lost tax revenue for the government.
"I mean, it's reasonable to say that they don't want to put taxpayer money on the line," Zandi said. "Nobody does. But I think we're at a point where if we don't try to alleviate the problems in the housing and mortgage markets, take some of the pressure off people who are losing these homes, that the economy will be in recession, and we'll lose more in taxpayer money because of the lost tax revenue, than it would cost to help them out. So I think we're at that point."
Editor at Large
Comments Policy
When do the bailouts end
March 14, 2008 - 17:54 ET by general companyYou think Zandi might read his own comments? This is pretty silly for a reputable economist.
The market will alleviate it's self, throwing good money after bad does what? When does it end? Dipsticks need to quite looking to the Goverment to solve their problems.
I once apon a time I lost everything due to job lost, due to Union nonesense , we did not whine, we learned. I never even applied for unemployment, just changed jobs until I found one I liked.
"Always do right. This will gratify some people, and astonish the rest". Mark Twain
Financially challenged
March 14, 2008 - 17:52 ET by c5thenThe scary part is that these financially challenged idiots actually believe that taking taxpayer money and bailing out private mortgage companies and private individuals will actually generate tax revenue They can't really explain how this works in any detail, it's just some vague idea that they hope people believe. Never mind that they've been crying recession for a couple of years, but now we are supposed to believe that all we need to do is bail out the 1% of defaulting mortgages and that will avert a recession.
The day that "politician" became a career choice is the day we started losing the Republic. Let's get it back! Alan Keyes '08.
Housing Crisis caused by Democrats giving monies for Mortgages
March 14, 2008 - 19:41 ET by PawpawNHousing Crisis caused by Democrats giving monies for Mortgages to CAMPAIGNS for BHO & HRC. Why couldn't the MSN pick up on this while this mere conservative did! If BHO can raise 55 million in the shortest month of the year & HRC over 35 mill, then maybe we should just let them be in charge of collecting monies for Govt and leave everything else as is!
Why in the hell!
March 14, 2008 - 20:49 ET by SlicksterDo I have to pay for my own mortgage plus pay for the moron down the street who is driving a Lexus???
Zandis' "plan" would simple
March 15, 2008 - 00:20 ET by jdhawkZandis' "plan" would simple lengthen the crisis not shorten it. People that couldn't afford the house they are living today will not be able to afford the house they are living in after our tax dollars stop. Then, the crisis will begin anew. Also, this "plan" simply supports speculations and speculators. The worse that can happen to people that can not afford the house they are living in is that they move to rented space. Albeit, at a much reduced rental payment due to this downturn in the economy and housing in general. Meanwhile, Moody's is a rating service. They rate, for example, the municipal bond insurers. They recently rated AAA (the highest rating possible) the two principal municipal bond insurers in our country Ambac Financial and MBIA. These two companies weren't happy collecting fat insurance premiums from municipalities like the one you and I live in. They invested heavily in sub-prime mortgages. For that reason, these two companies can't possibly be rated AAA. In fact, they are more likely to fail without substantial propping up possibly with our tax dollars. So, anything that you read, see, or view that involves this rating service or the others like Standard and Poors should be taken with a grain of salt.