BLOG WATCH
4% solution
“In the midst of the recent stimulus debate, an innovative Republican proposal emerged that would allow banks to refinance mortgage loans at fixed interest rates as low as 4%. But if you missed it, it’s understandable. It was immediately killed by the Democratic majority and essentially ignored by the mainstream media. The average home price is about $200,000, and let’s assume that entire amount is financed with a 6% mortgage. A reduction to 4% would save the homeowner $4,000 in interest costs every year. Multiply that by the 85 million homes in America and we get $340 billion in interest savings. Imagine the boost that could provide to the economy and the pressure it could take off America’s cash-strapped families. It may even jump-start the new home sales market.”
68 cents
“It’s pretty much impossible to get one’s head around the sheer enormity of the numbers in Barack Obama’s first budget. But it’s important to try, and one anonymous commenter has a very good point: the entire federal budget, as submitted by President Clinton in 1996 through 1999, was smaller than the budget deficit that Obama is proposing for next year. Obama’s total budget is $3.6 trillion, which works out at $34,000 per household; median household income is about $50,000. Which basically means that for every dollar that a US household earns, the US government plans to spend 68 cents next year. And the ten-year T-bond still yields less than 3%. Extraordinary.”
6% hope
“Here are the growth forecasts used to put out the new Obama budget, followed by the consensus forecast of a panel of “Blue Chip” private forecasters: 2009: -1.2%, -1.9%; 2010: +3.2% +2.1%. By 2013, Team Obama projects 6% higher GDP in 2013 than do private forecasters. Rosy scenario, or the audacity of hope?”
