Saturday, February 16, 2008

Bloomberg Rips Government Over Failing Economy

I have not said too much recently on economic issues, but in my view, things are getting worse in the economy and the ripple effect continues to grow as consumers cut back wherever they can, be it in terms of less eating out or even cutting back on visits to beauty salons. The economic stimulus package is in my view far too little, and far too late. Moreover, much of the legislation being entertained to stop foreclosure rescue abuses - both in various states and in Congress - is so draconian that it has the potential of discouraging legitimate real estate investors from purchasing properties headed to foreclosure out of fear that they may be caught up in regulations and/or criminal charges. Instead, investors will wait to purchase properties until after the foreclosure sale when lenders are struggling to get rid of unwanted properties. The result will be an even larger explosion in the number of houses sold at foreclosure. This in turn will further depress real estate prices causing even more borrowers to end up underwater interms of what they owe versus their home's market value. Meanwhile, the country's infastructure continues to go to Hell. Billionaire New York Mayor, Michael Bloomberg is in agreement (

Mayor Michael Bloomberg has unleashed another flurry of jabs on Washington, ridiculing the federal government's rebate checks as being "like giving a drink to an alcoholic" on Thursday, and said the presidential candidates are looking for easy solutions to complex economic problems. The billionaire and potential independent presidential candidate also said the nation "has a balance sheet that's starting to look more and more like a third-world country."
His tirade against the candidates and the economic stimulus package on Thursday began when he was asked how that experiment is going. In his answer, he praised Democrat Barack Obama for the plan the Illinois senator outlined on Wednesday that would create a National Infrastructure Reinvestment Bank to rebuild highways, bridges, airports and other public projects. Obama projects it could generate nearly 2 million jobs. Last month, Bloomberg and Govs. Arnold Schwarzenegger of California and Ed Rendell of Pennsylvania announced a coalition that would urge more investment in infrastructure. "I don't know whether Senator Obama looked to see what I've been advocating, or not -- you'll have to ask him -- but he's doing the right thing," Bloomberg said.
Specifically, he said the government should adopt a capital budget to oversee long-term infrastructure spending, instead of the current year-to-year spending. It should also offer financial counseling, modified loans, and in some cases, subsidized loans to homeowners who find themselves unable to afford their mortgages. He says that the government should also think differently about immigration, and that bringing more workers in rather than keeping them out is the key to long term economic stability.

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