Why didn’t the Obama administration push harder and earlier for broad-based reductions in mortgage debt levels during the financial crisis? Lawrence Summers, former director of the National Economic Council, and a primary architect of the Administration’s policies during that period, offers five reasons in a recent Financial Times essay. The top two: The potential for damaging the banking system, “which risked bringing down the system in an effort to save it”; and concern that forcing lenders to write down principal values on existing mortgages might deter future lending: “It did not seem unreasonable to worry at the time that if government forced the write-off of a trillion dollars of mortgage debt, flows of not only mortgage debt but also car loans and credit card debt to consumers would be inhibited as well,” Summers wrote.
WILLISTON FINANCIAL GROUP EXECUTIVE CHAIRMAN AND FOUNDER PATRICK F. STONE AND ECONOMIST BILL CONERLY, Ph.D. TO HOST Q4 'WFG INSIGHTS: QUARTERLY ECONOMIC OUTLOOK' WEBINAR ON DECEMBER 15TH
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