Debt moratoriums would probably bankrupt the big banks.
Sounds like a plan!
But since the big banks borrow at 0% interest and lend at between 4% and 29% little money would be lost except for their overhead. So they unemploy a few thousand bankers to compensate.
Serve them right!
But I'm betting the government buys the rest of the junk mortgages and saves their ass from lawsuits which will kill them. If they don't own this shit they can't be sued.
And the Fed can't be sued. The mortgages then either get paid off by investors buying the underlying assets, given away or the houses get bulldozed.
Problem solved!
Accounting Identities - NYTimes.com
Sounds like a plan!
But since the big banks borrow at 0% interest and lend at between 4% and 29% little money would be lost except for their overhead. So they unemploy a few thousand bankers to compensate.
Serve them right!
But I'm betting the government buys the rest of the junk mortgages and saves their ass from lawsuits which will kill them. If they don't own this shit they can't be sued.
And the Fed can't be sued. The mortgages then either get paid off by investors buying the underlying assets, given away or the houses get bulldozed.
Problem solved!
Accounting Identities - NYTimes.com
Oh, and widespread debt forgiveness (or inflating away some of the debt) would solve the problem.
But what we actually have is a climate in which it’s considered sensible to demand fiscal austerity from everyone; to reject unconventional monetary policy as unsound; and of course to denounce any help for debtors as morally reprehensible. So we’re in a world in which Very Serious People demand that debtors spend less than their income, but that nobody else spend more than their income.
And the slump goes on.
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