Michael David White at NewObservations.net had an interesting piece last week arguing that defaulting on one’s mortgage is a patriotic duty:
“The government is dropping nuclear bombs on the mortgage market and nobody is dying. They can’t move the product. What has been taking off are foreclosures. They are soaring. The general feeling is that foreclosures are terrible and should be stopped because of the distress they bring both to a family and a neighborhood. The more important truth, widely ignored, is that foreclosures promise to bring back cheap prices.
In our post-bubble world, foreclosures are the surest mechanism for creating affordable housing. Consumer advocates should now welcome this method of price correction. Those true to their mission will embrace a mass-foreclosure remedy.
In a credit bubble, the smart economist makes the highest goal a true reckoning with phony debt. The common man now has a chance to play the smart economist.
Let the house go back to the lenders. The bank will throw the mortgage in the garbage. Reality will return. Prices will fall – perhaps dramatically from our current 30% loss. Systemic mortgage debt in the United States should be reduced in amounts equal to the losses in real estate values. It’s trillions in the plural.
The government has screwed up management of the financial crisis by granting debt assets special status. It’s time for the owners of debt assets to take losses. It’s time for the people to fix the financial crisis. Give the debt investors the losses they bargained for.”
The full article -
http://newobservations.net/2010/01/12/default-is-a-patriotic-duty/
