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
SPONSORED BY:
Dear Mr. President
Email To A Friend
Please fill in the following information and we'll email this link.
SPONSORED BY
Update: After this story was published, we received a response from a seventh Nobel-winning economist, who had been traveling and was therefore initially unable to contribute his essay.
Sir Clive W.J. Granger was awarded the Nobel Prize in 2003 for his work on economic time series. Born in Wales, he has been a professor of economics at the University of California, San Diego since 1974.
Most economic recessions can only be broken by a change in opinion or attitude by the majority of the participants such as investors, buyers, or speculators. Any major figure, particularly a president, could influence the thinking of "investors" at certain critical moments. Such a change has to involve a new idea that sounds sensible and has wide acceptance. The $700 billion bail-out proposed by Congress did not pass the simple acceptance tests, but the "British" suggestion introduced by British Prime Minister Gordon Brown is performing well and getting wide attention.
The next president could state, for example, that his administration is implementing something like the British proposal, which clearly makes some common sense [even if unclear economics] and is being introduced by several other countries. The cost is less than previous schemes and is designed to be reversible in four or five years if successful. The money is going exactly where it is most needed! Should the Brown plan be widely accepted and acted on, we will still all face a few weeks or possibly even months of uncertainty before the world's economies get back on a sound trajectory.
Concerning [worries that] government spending would be too great: it would be less than continuing the Iraq war for a few years and much less than going to war with Iran, which is so casually debated. The costs should certainly be kept watch over and publicized.
Placing funds directly into banks also sounds like a plausible proposal. If it does not work we will have to survive a few more uncomfortable weeks before another plausible idea arises.
Finally, in my opinion, the new president should concentrate his energies on getting workers back to work and strengthening inustry, once the credit markets are working well.
© 2008
Discuss