As we head down the road----are we prepared for what is around the corner?

WARNING!!!

     Those of you that think that a world that looks like “The Road”  or the “Great Depression” (or anywhere in between the two) is NOT possible might as well stop reading right now. 

     My premise today assumes that such a scenario is possible. 

     I am not typically a pessimist and my premise should not be construed as what I think will happen, but is only meant as an attempt to open a door to another possible way to move us from current thinking toward other possibilities.

     The next assumption I will make is that a lot of the current economic mess was created by people that control the money.  Sure there were people that were given loans that probably should not have been given loans but that was done by the people with the money.

     The next assumption is that continuing to throw good money after bad is likely to only make matters worse.

     I fail to see how most of the people that “benefited” from the mess we are in have suffered much as a result of their creation.  Some would argue that they even continue to benefit.  It seems that if we continue on our current path that even they eventually will suffer----as we spiral out of control to some place between “The Road” and the “Great Depression.”

     Everyone talks about the “loss of value” of homes since the collapse.  Value that regardless of how “manufactured” it was has resulted in millions of people losing their homes, on the verge of losing them, or being in a position where all their money goes to pay the mortgage.  Since the likelihood of the planet ending up in the proverbial shitter is pretty good if something is not done, why not actually do something that might rescue us from ourselves? 

     I know the answer to this question, but humor me for the moment and entertain the notion that for once greed and selfishness might be put aside and we might do what is right for everyone----not just a select few with the power to do whatever they want regardless of everyone else.

     I do not pretend to understand economics and apparently even those that do don’t either-----so I might as well throw in my two cents.

     So here is the idea.

     Banks tend refuse to re-negotiate loans based on current value.  This results in houses ending up in short sale or strategic default.  Eventually these homes end up in foreclosure and the banks are forced to take whatever they can get for the house---often much less than even current market value.  This is especially true if the houses have been trashed/vandalized during the period of time when no mortgage payments have been made and have been vacant through a couple of winters. 

     Why not force the banks to renegotiate mortgages based on the current market value of the home? 

     In fact, how about if all mortgages automatically floated according to a “current market value index?”  Wouldn’t this then reflect the ability of people to pay those mortgages based on reduced job opportunities and layoffs that tend to coincide with economic downturns?  Those that benefited from having good jobs and lower mortgage payments would then have more disposable income to spend in the market place which would create more jobs and demand for goods that would then help drive the economy.   When the only thing that people can afford to do is pay their mortgages, it seems to me that only the banks benefit and we are at the mercy of what they do with that money which is primarily committed to their corporate interests-----people have NO disposable income to stimulate the economy.

     Am I missing something here?

     Just walking down the road.

 

Charles Buell, Seattle Home Inspector

 

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