Entry 2

Regulator Rebuffs Obama on Plan to Ease Housing Debt

New York Times, August 1, 2012

http://www.nytimes.com/2012/08/01/business/us-agency-bars-fannie-and-freddie-from-reducing-principal.html?_r=1&ref=economy

Summary

Federal Housing Finance Agency rejected the government's policy of alleviating the debts of borrowers for not resulting tremendous outcomes to the taxpayers. The financial administrators Fannie Mae and Freddie Mac appraised the actual benefits of the debt forgiving policy inconsequential. Furthermore, the agency's acting administrator, Edward J. DeMarco stated that this policy does not actually helped neither debtors nor taxpayers, and it even casts a doubt that Obama's Administration is enforcing it for a temporary stopgap. On the other hand, there are still some positive prospect that alleviating mortgage may allow millions of Americans to keep their homes while the banks to earn billions of dollars. For the most part, there is no clear appraisal on how debt ease plan can impact on America's economy. 

My thoughts

The core factor that caused huge collapse in American economy in 2008 was subprime mortgage. Since people indiscreetly got a loan to buy the house that they cannot afford, they cannot endure the dramatic increase of interests, resulting millions of foreclosures throughout the states. As a matter of fact, government has an oblige to protect the people cajoled by government policy and banks which instigated subprime mortgage. Even though this massive-scale-financial policy may not be realistically beneficial for taxpayers, the government must compensate the economical loss and protect their rights of pursuing happiness (keep their houses). In last, I believe that the government must take a direct action solving out this issue even if experiencing huge loss in governmental revenues.