By every industry measure, foreclosure is a huge problem. Earlier this year, the financial services giant Credit Suisse estimated that there will be 6.5 million U.S. foreclosures during the next five years.There's nothing to be done about the millions of empty homes except let the market lower the price. Then, just as the dark fibre laid during the Internet bubble has been brought to life and put to use, so too will these houses be acquired for reasonable prices.
All of this bailout crap isn't going to solve this problem. Sure, it might help some banks with their liquidity issue, but then again, it might not. Nobody can say without a proper accounting. Now with the most recent rule change that banks don't have to value their loans at market prices, it will be even harder to do any bookkeeping to figure out what the frick is going on.
To address that problem, David Colander, a professor of economics at Middlebury College, has another idea. He wants part of the $700 billion bailout to go directly to U.S. consumers in the form of housing vouchers. The vouchers could be used to pay off loans, or even better, to persuade some renters to jump into the homeownership market. Nothing greases the housing market quicker than turning renters into owners, he said, calling it a "trickle-up policy."
Free homes for everyone! Brilliant. Just fucking brilliant. Meanwhile I'm hit with a $5,000 bill for this $700 billion bailout so my neighbor can get a free home. Just great.
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