Quadlet on Time.com

Time magazine writer Stephen Gandel has posted an article on Time.com Treasury's Plan for Mortgage Rates Could Be Costly. He references my 2006 article Are Real Estate Prices Dependent on Mortgage Rates. The Time.com article discusses a secret Treasury plan to lower mortgage rates to spur the housing market. Stephen's article uses my article to be critical of the plan, like a counter-point. The article also has a quote from a professor emeritus of Wharton to back up my claims.

So, you might ask, do I think the Treasury should go through with such a plan? I would say yes. The real conclusion to draw from my study is that the link between mortgage rates and real estate prices is not a simple one. The economy is a complex interconnected web of correlations and cause-effect relationships. There is no "silver bullet" simple answer to our economy's current problems. In my opinion, the Treasury and Fed should use every tool available to them.

Part of the government's job is to act in difficult times to help the economy get through the cycle and ease the natural corrections of the economy. The government should run a deficit in 09 to help spur the economy. As long as the president understands that in 2-3 years, when the economy is charging again, that the government needs to return to surpluses. Even though no one is talking about it, the Social Security problem is not going to fix itself...