Paul Krugman says, The Government’s Job Is to Create Jobs

Nobel Prize winning economist Paul Krugman also backs the idea. In his latest New York Time column, Krugman says “the federal government could provide jobs by … providing jobs,” in much the same way the New Deal put Americans to work during the Great Depression.The President is also taking aim at the lingering housing problems by putting added pressure on lenders to finish modifying more home loans to troubled borrowers.Almost 651,000 loan revisions have been started through the administration’s $75 billion Home Affordable Modification Program, but too few are being converted to permanent repayment plans says the White House.But do the modifications really help? Aaron and Henry point out, data already shows that the modification just postpone defaults and foreclosures. A better solution would be for banks to take a hit on the mortgages, by modifying the principle owed on the mortgage.It’s not what banks want to do but it may be a necessary evil.

Vodpod videos no longer available.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: