Loan Modification

The Fed Has Spoken: No Bailout for Main Street

By Implode-Explode Heavy Industries

If the Fed could so easily come up with $12.3 trillion to save the banks, why can't it find a few hundred billion under the mattress to save the states? Obviously, it could, if Congress were inclined to put non-bank lending back into the Fed's job description. Then why isn't that being done? The cynical view is that the states are purposely being kept on the edge of bankruptcy because the banks that hold Congress hostage want the interest income and the control... [Congress] could issue its own debt-free money and spend it on repairing and modernizing our decaying infrastructure, among other needed works... the states could take matters into their own hands and set up their own state-owned banks based on the [Bank of North Dakota]'s model. They could then have their own very low-interest credit lines, just as the Wall Street banks do. Rather than spending or selling off valuable public assets or hoarding them in massive rainy day funds made necessary by the lack of ready credit, states could leverage their assets into a very strong and abundant local credit system, following the accepted business practices of the Wall Street banks themselves.

Full post as published by Mortgage Lender Implode-o-Meter on January 14, 2011 (boomark / email).