Treasury Secretary Paulson said today the housing prices should be allowed to continue to fall in order to allow markets to stabilize and allow buyers to come back into the market.
In other words...That $1.2 Trillion worth of Home Owner equity at stake in the crisis should evaporate. That $1.2T is from a seperate report looking at the write-offs that may happen in regards to loans. It doesn't take into account the lower values of homes that people will hold onto. Regardless $1.2 Trillion equals $4800 for every man women and child in the US, or $24,0000 for my family alone.
The problem with that statement is that it does forget families, which is whose skin this is peeled from. Imagine...they believe the sending my family $2100 is going to be a big stimulus to the economy...what do you think asking me to pay back that $24,000 is gonna do to the economy?
Unless a stabilization plan is put into place, people en masse are going to walk away from their homes. It is already happening. Then the next ripple is to those like me that hold our home and make our payments is that the value further erodes.
Hey...it is my debt, I signed for it. But if you are the government, make sure to see who your are flipping off before you raise the bird!