The second thing I would do is to give a tax credit for health care ( in addition to the mortgage interest deduction) to anyone paying a mortgage, for so long as they continue to pay the mortgage, again, another step toward universal health care for another segment, plus gives huge incentive to NOT file bankruptcy..
I would also defer or eliminate taxes on the interest banks earn on mortgages, so long as the interest rate was under 6%; this would encourage those predatory lenders to wise up and perhaps encourage investors to buy those mortgages at new rates
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THE ECONOMY
Dear Mr. President
Advice from seven Nobel laureates on fixing the economy.
Published Oct 22, 2008
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As grim financial predictions dominate the news, it seems everyone is scrambling to become an expert on the economy. With the presidential election right around the corner, the pressure to craft a coherent narrative on the country's financial woes is especially high in Washington. It's been called a perfect storm; the combination of volatile markets, looming energy crises and high-stakes politics has delivered a moment of national focus, with more than 89 percent of the country believing that a fundamental shift is needed in how America runs itself.
But a shift to what? Both John McCain and Barack Obama have presented a series of ambitious economic packages that have further polarized both sides of the aisle, as well as Wall Street and Main Street. Perhaps the only matter universally agreed upon is that the next president—whoever he may be—will face a daunting set of fiscal challenges and a dramatically reduced set of resources with which to confront them.
To make sense of those challenges, NEWSWEEK invited winners of the Nobel Prize in Economic Sciences to explain how they would advise the next president in crafting and prioritizing his economic-recovery efforts. Excerpts:
Paul Krugman, a professor of economics at Princeton University since 2000, was awarded
the
Nobel Prize in 2008
for
his work on international trade patterns. A twice-weekly columnist in The New York Times and former columnist in Fortune Magazine and Slate, he served on the U.S. Council of Economic Advisers from 1982 to 1983.
The idea that a new president should emulate Franklin Delano Roosevelt's first 100 days—a blizzard of activity to address a national crisis—has become a cliché. But this time it's exactly right. Assuming that this election goes the way almost all projections say it will, with Barack Obama taking the White House and Democrats greatly reinforcing their control of Congress, there should be rapid and radical action on at least three fronts.
First, the economy will almost surely be in a nasty recession by January. As soon as possible, the administration and Congress should fight this recession by putting in place a major fiscal-stimulus plan, this time centered on spending rather than tax cuts—aid to stressed state and local governments, expanded and extended unemployment benefits, and some serious public-works spending. The goal is to do well while doing good—to provide much needed help to individuals and help repair our frayed infrastructure, while at the same time supporting demand and employment.
Second, the administration should press rapidly forward on financial regulation. I hope—hope—that by January the financial rescue efforts already underway will have relieved the worst of the credit crunch. But even if they have, that's only the first step. We need much-expanded regulation to protect against a return of the financial crisis; if financial institutions need to be rescued like banks, they need to be regulated like banks, with the key things being capital requirements and oversight.
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