Proposed Foreclosure Prevention Program

[TheNiche]

http://www.chron.com/disp/story.mpl/front/6266385.html

The plan, which Obama is releasing later today, is more ambitious than initially expected

[BryanS]

then flood the economy with printed money.

So we can live in a hyper-inflated economy like Italy where the dollar becomes just as worthless as the lira (was)? That'll work...

[TheNiche]

So we can live in a hyper-inflated economy like Italy where the dollar becomes just as worthless as the lira (was)? That'll work...

Yep, that's exactly what happens if we take it to too far an extreme and ____ things up.

But our monetary policy ammunition has been all used up. The Fed can't do much more, and fiscal policy promoting seigniorage is the next step. In the business section of today's online Chronicle, there is an article announcing that the UK will probably go that route very soon. And a little bit further down, there is an article saying that deflation risk in the U.S. is elevated.

If deflation (from doing nothing) and hyperinflation (from doing too much) are on the extremes, I prefer to at least take the same middle ground as other major trading partners seem inclined too...at the very least, we don't have to worry as much about distortions to the balance of trade. It really hurts our manufacturers when trading partners devalue their currency relative to ours, so that's one more reason to try and keep pace with their fiscal policy. That introduces another risk, admittedly, that various countries race to devalue their currencies, but I think that cooler heads would prevail. I hope there's a treaty to that effect.

Any outcome along the spectrum is plausible, though, and I have no idea where we'll actually end up.

[Mark F. Barnes]

So we can live in a hyper-inflated economy like Italy where the dollar becomes just as worthless as the lira (was)? That'll work...

Well that's just where we are headed with all this "Bailing Out", excuse me, "Stimulus Spending", oh wait, "Economic Reconciliation".