Serious question: How will renegotiating the principle on home loans stabilize the economy? Is this likely to increase or decrease values?
My first reaction is that it won’t do a thing. To me it seems like propping up the system of keeping people in homes they can’t afford. That obviously hasn’t worked out so well. If principle values are increased then people have equity magically pop up into their investment. Smart ones will not touch that, but most people who are in over their head would probably be likely to borrow against that and spend more than they should again. Whats the deal?