Another thing the gov’t fails to even recognize much less acknowledge and act according to is that a lot of people upside down don’t want to refi and stay in a home that won’t make them rich like they thought when they bought.
Some might say the gov’t would rather have “owners” paying whatever they can, but that will only lead to more losses at banks, less lending, more bailouts, and so on down the vicious cycle of government problem “solving”.
Cold turkey would have been best 3 years ago. Just imagine in Bernanke had come in and said rates are too low, prices are too high, and the economy can handle a rate hike right now.
It’s hard to imagine that being any worse than what we’re seeing now.
