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."
