Government is running out of options to bolster economy

[seafan]

Government is running out of options to bolster economy

By TOM RAUM
October 10, 2008

WASHINGTON -- Committing $700 billion didn't impress markets here and around the world. Neither did fresh interest-rate cuts. Neither did the idea that the government would become a part-owner of U.S. banks.

So what's left in Uncle Sam's economic tool kit?

The government still has some unused options -- like buying up foreclosed properties and making direct loans to homeowners -- that might ease the credit and housing crises and brighten the economic outlook. But the options are dwindling and generally involve partly taking over private companies, an idea that's anathema to economic conservatives and others in America.

.....

The Fed presided over by Alan Greenspan kept interest rates at 1 percent for a full year earlier in the decade -- and many economists suggest that was one of the root causes of the housing bubble, making it too easy for people to take out loans they couldn't afford. ..... Many economists say that the actions taken so far do little to address what is at the heart of the spreading financial contagion: falling housing prices and rising foreclosures.

.....

The (Resolution Trust Corporation) RTC was set up to deal with the savings-and-loan crisis (of the late 1980s and early 1990s). The government took over more than a thousand failed S&Ls, and all their assets. It wound up owning foreclosed homes and other property, eventually reselling them.

It took six years to clean up that mess. The total cost to taxpayers: about $125 billion.

.....

World Bank President Robert Zoellick suggests greater coordination with other major economies in an economically interconnected world. For starters, he says, the Group of Seven club should be expanded. In addition to the G7 countries -- the United States, Japan, Germany, Britain, France, Italy and Canada -- membership might include Brazil, China, India, Mexico, Russia, Saudi Arabia and South Africa, Zoellick suggests.

Just don't know what to say any more, except remove the bloody, bloated maggots from the White House, Wall Street, Congress and the Pentagon and prosecute them.