shameless stolen from Brad Delong
ANSWER ME THIS:
why don't we
- take $700 billion and divide it by the US population of 300 million and give every one of us a $2,330 10 year CD.
- Then assign these to every lending institution operating in the US in proportion to its current capitalization.
- Transfer the assets of the lending institutions into a trust which pays interest and principal to the Federal government.
Will some economist explain why this doesn't wor
The banks will have needed capital reserves. And they will take huge losses, as they need. And then force them to rewrite mortgages. Because while I dislike giving money to someone who bought more house than they can afford; I dislike homelessness even more.