Chase automatically refinances morgages

[opebo]

Without even the debtors requesting it, reducing rates and payments.  This is great, and sensible, but what I would like to know is why doesn't the Fed take over all mortgages on this basis?  They could all be bought by the Fed en mass, refinanced at 0.5-1% interest, and/or the term extended to 50-60 years, thus eliminating a major drag on the economy.

[opebo]

And housing inflation, housing being 40 percent of household expenditures, is the mammoth in the room of uncounted inflation that is missed by the CPI.

But Beet! The story of housing is massive, catastrophic deflation!  This is precisely what has collapsed the economy.  We need to reflate house prices, by having the government take over the mortgage market.

That's the only thing I don't like about this proposal. 0.5-1% mortgage rates would simply lead to another housing boom, which in turn would force poor, young, household formers (the very people we want to help, both for moral and economic reasons) to take on proportionally more debt.

Nonsense! It would merely lead to a reflation to non-depression conditions.  And for those poor young workers - the current deflation has done nothing to help them - they simply don't buy because who would buy a falling asset?  They rent.  Only a reflation can allow anyone to buy reasonably.  (that said I believe there is a severe problem about inadequate incomes to pay for everything including housing, but inadequate incomes are an argument for reflation of working class wages, not deflation of housing).

Of course, one way to address this may be a cap on the price of the home that the Fed will buy the mortgage off of. Perhaps, for instance, homes under a quarter million, the Fed will subsidize fully, those between a quarter million and half million, they will subsidize a little, and those over a half million, none at all. That would still have an inflationary impact, but not as much.

Well, I agree we should only subsidize the lower-income home-owners.  Your idea of penalizing the wealthy is excellent - another way to do this would be to nationalize all mortgages, but institute a surtax on incomes above $200,000 - say 10%.  

However, regardless, inflationary impact is precisely the goal of this program - to end and reverse deflation, which is our number one problem.

[opebo]

But the problem is how do you turn it off so you don't overshoot?  If we "nationalized" mortgage debt tomorrow people that want to buy a house a year from now would want the same deal and which politician is going to say no?

You don't say no, you say 'yes'. 

Then we are right back to where we started.  Easy money sending house prices into the stratosphere.  The problem is the US economy is too heavily based on luxuries... the real problem is 99% of Americans don't even realize it.  They honestly think it's reasonable to own a four bedroom house in the suburbs with an SUV and full sized car parked in the driveway and a flat panel TV in every room.

It is precisely reasonable and necessary, Link.   We need to make sure that all workers can live in this style, by reflating their incomes as well as their borrowing capacity.  If every adult male made a proper 'union wage' of $35-50/hour as was the case during more reasonable economic eras, and bought three cars, a four bed-room house with pool, a second house at the lake or shore, a boat, and sent 2-3 children to university, we would have no problems about recession or - more crucially - long term social problems.

You do not see that level of rampant consumerism in other countries and it is ridiculous that the average person regardless of party thinks the government should implement measure to perpetuate that kind of nonsense.  Look at gas prices.  People moan about them but I don't see young stay at home moms zipping around in Toyota Yarises.  No, they want Obama to make gas $1.50 a gallon and drive around in a suburban or SUV.

Your argument is rather beside the point, but I will consider it.  Most economists expect 'innovation' to provide a way around scarcity of certain resources, and even if it does not, what is our super-powerful military for if not to seize those resources from other nations?

[opebo]

Wouldn't it be much simpler to fire the military and create union jobs building trains and solar panels in Arizona? Maybe someday the market can "innovate" us an electric SUV.

Fair enough.  But regardless of what we do about the eventual end of the world, we need reflation now.

[opebo]

Well, Link, we should really use the years around 1969-1973 as the benchmark because that was when the American worker reached his peak of well-being.  And I think our primary focus should be on removing the powers and privileges of the owning class rather than being too concerned about 'excessive consumption' on the part of workers.

[opebo]

No one is putting a gun to anyone's head.

Yes, they are.  Our society is built on coercion. 

You must be logged in to read this quote.

This isn't really relevant to the discussion, Link.  One mustn't get to bogged down in this fantasy of 'individual people' and consider more the structure and operation of society as a whole - as a system.

That said, I don't even know what an 'I-phone' is.

[opebo]

Precisely, apple should be nationalized to provide $30-50 an hour union jobs. The success of apple should not go to the shareholders, all of it needs to go to the worker.

Jesus F. Christ that is a lot of money.

No, its just $60,000-100,000/year.  Paying adults in their peak earning years anything less just guarantees social ills, and the fabled union wages of yesteryear were in that range, plus benefits.

[opebo]

$30-50 an hour union jobs.

Jesus F. Christ that is a lot of money.

No, its just $60,000-100,000/year.  Paying adults in their peak earning years anything less just guarantees social ills, and the fabled union wages of yesteryear were in that range, plus benefits.

Well opebo it would be slightly less if proper working hour(less than 1800 a year) were instituted, by getting rid of redundant (micro)-managers.

I agree we need to move toward a 20 hour work week.