Foreclosures must be stopped to help the economy

A discussion was held at Commonwealth Club of California hosted by Andrew Leonard of Salon.com. The speaker was Dr. Joseph Stiglitz of Columbia University. He sharply pointed that the way things were drifting it seemed that the economy would again go into a tailspin.

Stiglitz recounted a powerful narrative of the collapse and its suggested palliatives in his writing – Free Fall. He said that the Republicans are presenting a story that is crossing each other at all points.

If the public swallow this Cato School, America may be hopping on to a Time Machine and go back in reverse gear to the second time inauguration days of Roosevelt. It was Depression – Act II.

That year Roosevelt had been smarting under public criticism. He was pulling back government supports and this happened to be the biggest mistake in his career as a politician. Obama today too seems to be buckling under criticism. If he had to face a Republican majority in any one of the houses, as seems more possible now than it seemed two months previously, similar to Roosevelt, he would start running backward.

Since the times of Clinton, Americans have forgotten that in needy times the government is supposed to spend and save during sunny days. But that does not mean repealing of Glass-Seagall Act can be forgiven. The progressive supporters cannot comprehend how the Republicans after having funded war for eight years and indulged in extravagant tax breaks is now brazen enough to talk about responsibilities in budgetary matters.

It seems to be lost that many of them too are gaining from the extending federal benefits on many fronts. Whatever that is – the tide of discontent cannot be stemmed about government spending.

The reality is that there will be an increase in foreclosure numbers in 2010 compared to the previous year. At this point should the support for the government be stopped? Hiring of employees has started off on a weak note but even that will come to a halt. At a time when the states are juggling with cloudy budgets should the rug be pulled under their feet by withdrawing federal support?

Stiglitz is unhappy that the Democrats are governing the country with the mentality of the opposition. Without force the voices of think tanks like Stiglitz would be drowned by the mob although they are presenting the true picture.

The experts want firm regulation of the banks, the insurance firms and the brokers who work for them. Gambling with the economy has to be stopped.

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