So we’re all told that people defaulting on their mortgages is a bad thing.
But what if you viewed it from a different perspective? The economy is a mess. Consumers aren’t spending enough. People are struggling to make mortgage payments on homes under water. They stop making mortgage payments and default. They free up money to spend on other items. Ipso facto, you have an artificial stimulus program.
We’re not saying it’s the right thing. It’s not. Sooner or later, those facing foreclosure will get booted from their homes — and they’ll have to pay for lodging, somewhere, somehow, and then their “stimulus” days will be over. We also won’t get into the ethical and moral arguments against people breaking their contractual promises.
But, when you think about it, there has to be some sort of “stimulus” surge when deadbeats stop making payments to banks and start spending freed-up money elsewhere. Just pointing it out.
File under: Crazy ideas for crazy times