US Government considering paying people's mortgages

[Sardauk]

king_of_the_castle said:

Sardauk said:

king_of_the_castle said:

Sardauk said:

NJ5 said:
The government can't stop the domino effect. At best they can hold some dominos for a while, but they can't do it forever.

What they can do is... not give money.. but loan some money, because, in theory, governement are at risk-zero.

Here they loaned some money to the banks and became shareholders. When the economy will be more stable, they will be able to buy back the shares and their independancy.

This way:

1- Confidence is restored,

2- Credits are released

3- Companies can go back to their business and people stop loosing their jobs

 

If everything works well, the governement might even make a profit out of it.. which will be reinvested in the national economy.

... well that is in theory... ...

 

Your theory is based on the assumption that those companies will spend that money wisely, but really this is like giving money to a crackhead and thinking they'll buy food with it.

What ?

Of course not-> it is MONEY TO THE BANKS ! It is regulated (see Baal II, Basel II banking regulation and risk mitigation).

It is not my theory, it is what EU governements are doing at the moment... (The theory part is about making money out if the loan between banks and governements).

Companies only get credits from the bank like they alway did (Nobody runs entierly on liquidities...).

Jeez....

Banks making terrible loan decisions are one of the main causes of the recession....just b/c they are regulated doesn't mean they can't squander money.

No because when the governement becomes the biggest investor (even temporaly), they have seats in the steering comitee.

Simple...