Off-Topic: This is a silly analysis

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	Name:	MartiniMan -
	Subject:	This is a silly analysis
	Date:	10/8/2008 9:40:01 PM

Another economics lesson for the illiterate.

The fact is that at the end of April ess than 0.2% of all mortgages are in default. That means 99.8% are NOT in default. So if the government buys a $200,000 mortgage on a house worth $100,000 it does not mean they take a loss. Mortgages are bought and sold all the time and when someone buys my mortgage it doesn't mean I suddenly don't have to pay it back. It means I pay someone else back, in this case the government. If the government elects to they can in the case of struggling mortgage holders revise the terms to allow them to repay the loans because they are not constrained by the need to make a profit. The fact is most people that are struggling to repay the loans were duped by unscrupulous loan originators into excotic loans that became too costly to repay. So, they redo the terms of the loans, the people stay in their homes and repay the mortgages. All is joyful.

And in doing this the government creates greater liquidity in the marketplace by giving lenders cash so they can continue to lend to other borrowers which will help stimulate the economy and stabilize home prices. Hopefully they won't listen to the likes of Barney Frank and Chris Dodd and will only lend money to people that can afford to pay it back under reasonable terms.

I mean, do you actually think critically about the things you write or do you just take them off of some leftist website without any thought? It is just embarrassing but it does point to the continued failure of government schools to teach basic economics and critical thinking. C'mon GF, you can do better than serving up these softballs. Give me something that actually challenges my intellect.