Does it make sense to encourage credit card spending?
Hank n' Ben are at it again, rolling out another 800 billion salvo, this time with the goal of getting more mortgage and credit card debt into the hands of the public.
Am I the only one who thinks this is borderline lunacy?
People, our country is poorer. The bursting of the housing bubble lowered national wealth by trillions of dollars. We are going to have a recession because of that, financial crisis or no financial crisis.
I do agree that the Fed has an important job to serve as lender of last resort and protector of the viability of the overall financial system. Several of the previous 500 billion plus salvos were more or less aimed at accomplishing that goal.
This latest to me just seems like a badly misbegotten stimulus package. House prices need to find bottom, not be propped up by subsidized mortgage lending. Consumers need to be using less credit, not be enticed into further debt by government subsidies.
Isn't this eerily similar to what got us into this mess to begin with?