I couldn't agree with you more. We are heading for a Japanese style economy right now. We will be overburdened with debt and GDP growth will be severely muted, which means asset price deflation. We are following their playbook exactly, yet we expect different results. Saying it is different because we are Americans is nonsense. The Romans probably said the same thing a few centuries ago. The Brits said this in the late 1800s.

I couldn't agree with you more. We are heading for a Japanese style economy right now. We will be overburdened with debt and GDP growth will be severely muted, which means asset price deflation. We are following their playbook exactly, yet we expect different results. Saying it is different because we are Americans is nonsense. The Romans probably said the same thing a few centuries ago. The Brits said this in the late 1800s.

There's your problem right there. You can't use the words “think” and “government” in the same sentence!

Seriously though, they have no clue what they are doing. They are just throwing money at everything, hoping that some of it will stick. Like you said, the best thing they could do would be to get out of the way and let the market and current black-letter law take care of it.

Those who cannot pay should be foreclosed upon, opening up an opportunity for other people to take advantage of the lowered prices. But in order for this to happen, we need to stop the pretending with the banks. We need to reinstate mark-to-market accounting and force these banks to mark down their losses. Every day that they get to continue these shenanigans is another taxpayer dollar wasted.

If the government is so intent on making homes affordable then why are they propping up housing prices!?! They named the freakin' program the exact opposite of what they are doing! Let the foreclosures happen so price comes down instead of subsidizing defaulting borrowers so prices stay up. They want to have their cake and eat it too.