It's Time for Debt Forgiveness, American-Style

[xchrom]

http://www.thenation.com/article/164216/its-time-debt-forgiveness-american-style

The rebellious citizens occupying Wall Street shock some people and inspire others with their denunciations of bankers, but everyone seems to know what they are talking about: it is the barbaric and suffocating behavior of the nation’s largest banks (yes, the same ones the government rescued with public money). Right now, these trillion-dollar institutions are methodically harvesting the last possible pound of flesh from millions of homeowners before kicking these failing debtors out of their homes (the story known as the “foreclosure crisis”). This is a tragedy, of course, for the people who are dispossessed. For the country, it is a generational calamity.

“We are in the reverse New Deal,” Christopher Whalen, a savvy banking expert at Institutional Risk Analytics, told me. He meant that events are dismantling the ingenious engine that helped generate America’s broad middle class. Homeownership was the main driver in accomplishing that great social change. For three generations, people of modest means could buy a house knowing it would secure their place in the middle class and allow them to accumulate significant savings. If the family held the standard thirty-year, fixed-rate mortgage, they were painlessly saving for the future every time they made a payment, acquiring greater equity in the home as they did so. With moderate inflation, the house would steadily increase in value even as their monthly mortgage payments stayed the same. So the cost of housing actually declined for the family, as a percentage of its income. Meanwhile, the accumulating equity became a nest egg for retirement or something to pass on to the kids.

That virtuous process, originated by New Deal reforms, is in peril and has already shut down for tens of millions, especially working-class families whose incomes are no longer rising. As described by the brokerage investment firm Amherst Securities, the housing picture is ugly. Among the 55 million families with mortgages, one in five is underwater—they owe more on their mortgage than their house is worth—or already delinquent. That’s 10.4 million families who are sliding toward failure and foreclosure. Virtually all of them will become renters, since no bank is likely to give them a new mortgage.

[midnight]

1. Great article about how reversing the New Deal is collapsing this countries

working class infrastructure, and how those in Washington are incompetent in their jobs... Time to vote them all out of office.....

[catrose]

2. You would think the RWs would be for it

Debt forgiveness being such a Judeo Christian thing. Every 7 years, debts were forgiven; it was called the Jubilee year. To the Christians who say, "That's in the Old Testament," remind them that the verses condemning homosexual acts are also there. (Greek Testament condemnations refer to patronizing boy prostitutes, not the same thing.)
:sarcasm: :sarcasm: :sarcasm: :sarcasm: :sarcasm:

I do know the term "Hebrew Bible," but the RWs don't

[MISSDem]

3. If so many houses are standing vacant and will be for years,

why do the financial experts and housing folks cheer when the number of "new housing starts" is up? I'm confused.