[quote=threadkiller]If the government buys stock in banks, is that not an endorsement of past behavior? I think the government should buy the foreclosed property much like any rich/smart? investor would who had cash. Of course this will still lead to inflation. Inflation is inevitable, just like in post depression Germany when it took a wheel barrow full of cash to buy a loaf of bread. Inflation will also help those that are struggling with their payments but can still manage. Although food will go up (invest in rice and corn(cheap food) futures), the amount(%) paid toward mortgage will go down. That is what is needed and that is what will happen.[/quote]
I think that the current government considers remediation more relevant than endorsement. Maybe I am wrong on that. However, I think the analogy that CNN kept using today (yes Tuesday is my day off-I am a loser) was that fire prevention analysis should not keep you from using a fire extinguisher. Now I am not sure how useful that is as a metaphor, but it is a decent point.
Regarding inflation, I don’t think that we hired either the Weimar head of currency of the Zimbabwean ministry of treasury. Nobody is talking about doubling or tripling the money supply (though of course, that could change) but just about making good on our obligations and stabilizing the credit market through cash injections. I think that the foodstuff concern is a bit hyperbolic but your point about the diminishing importance of housing costs is well taken and valuable.
