Stop the Insanity
I'd like to expand on Tuesday's column and take a broader look at housing and the economy. The International Monetary Fund recently released its Word Economic Outlook for 2012, which, among other things, addresses the global housing crisis and examines 99 housing busts in 25 advanced economies in the past 30 years (see chapters 3 and 4).
I won't get into details, but the highlight is that economies suffering housing busts coupled with inflated household debt have suffered economic contractions of at least five years. An important part of the corrective process that can be supported and accelerated by government intervention has been debt restructuring and debt forgiveness. Ironically, the best example offered by the report is the creation of the Home Owners' Loan Corporation by President Franklin D. Roosevelt in 1933. That organization bought up non-performing mortgage debt from banks and restructured it to afford mortgagors the ability to avoid foreclosure....519 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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