Big Ideas to Fix the Economy: Boost Housing Prices

Tuesday, August 16, 2011

On the heels of the debt ceiling crisis, Congress has established a "super committee" to find ways to reduce America's debt.  The twelve-member committee began work on debt-reduction strategies this week, aiming to come up with a plan to reduce the deficit by $1.5 trillion by Thanksgiving of this year. But as lawmakers lock horns over where to find spending cuts, we've been asking our listeners for suggestions on how to fix the economy. One suggestion our listeners had was to boost housing prices.

Christopher Mayer, Paul Milstein professor of real estate at Columbia Business School, joins us to discuss what the government might do to raise the cost of the average home, and how this strategy would help the economy. Marthenia Dupree, a Takeaway listener from Miami, also joins us. Dupree is underwater on her home and looking for a solution.

Guests:

Marthenia Dupree and Christopher Mayer

Produced by:

Posey Gruener

Comments [19]

John from Green Bay,WI

Elect Ron Paul president. That the government of the people, by the people, and for the people, shall not parish from the earth.
Constitutional justice. Philadelphia Freedom 1787-2012

Nov. 23 2011 08:14 AM
Mike SMith from CO

tear down all the toxic class housing inventory the government bought on behalf of the American people; too many houses are out there stifling the marketplace. Take the damn loss & move forward. Throw Countrywide and all the other bankers who created this mess (includsing Frank & Dodds) into jail for creating this mess (thereby assuring the people that the Gov is not a milquetoast when it comes to these crooks) Make room for future development & create jobs today by tearing all these properties down- the Fed 'owns' 'em, doesn't know what to do with them or how (like many other problems out there) so eliminate the problem & create a solution all at once.

Sep. 08 2011 02:25 PM
anna from new york

A miracle. A miraculous disappearance of intelligent comments.
NUR DIE IDIOTEN can comment.
dr anna

Aug. 17 2011 10:51 AM
Joel Wischkaemper from Washington State

Two elements have combined to sweep us up, and deposit us on this 'doorway'.
1. We are using the cheap labor of China extensively, and have for a long time. Interestingly, the very best coming out of China today is done by American Companies, European Companies, and clearly a reflection of labor costs.. but not restrictive governmental practices for production.
2. The promise of Computers, and the thought that they would 'run the world' has never actually happened until those computers became reliable. The main frames and the PC's you buy today are reliable, and BIG!! People are being replaced by computers at every opportunity you can think of, and a whole bunch of places we can only guess.

Confront these two ideas today, and lets start figuring out what we need to do about tomorrow.

Aug. 16 2011 02:33 PM
Equalize capital gains and earned income tax rates from Tax simplification to make Republicans twitch.


Currently, tax rates on capital gains is a fraction of the tax rates on earned income.
As Warren Buffett has pointed out - billionaires like himself pay much lower tax rates than their secretaries.

So here's a "Tax Simplification" proposal that will raise substantial revenue (and make Republicans twitch) :

Treat ALL income the same.
Earned income and capital gains should
be taxed at the same rates.

If you must keep this revenue neutral,
use the proceeds to lower the rate on the lowest tax brackets.

(This will also be stimulatory, because poorer people spend more of their money than wealthy people do, so a tax break for the poor and middle class is more stimulatory than one for the wealthy).

Aug. 16 2011 01:39 PM
4 day work week to stimulate employment from spreading the work


A 4 day work week would spread employment and would stimulate spending. A great recession is therefore the ideal time for a national law creating a four day work week.

Alternatively, one could require that the extra day be used for either community service or education/retraining.
This would encourage full time employees to retrain and keep their skills up to date.

Since a large percentage of the work force is part time, the US would need to create laws that grant a PAID day off for every 12 to 15 hours worked. This would prevent employers from firing full time employees to switch more to part timers. Part-time employees should also be granted - by law - a pro-rata share of the cost of benefits for full time employees.

Aug. 16 2011 01:32 PM
Free online University Education with Degrees from a free university education for all Americans


The U.S. should create and fund a free online university. This university should grant credits and degrees for people who
take the courses and perform sufficiently well in them. The university should issue
transcripts like normal universities.
Transfer credits for its courses should be
accepted by any university which receives
federal funds. Acceptance of its degrees as indication of qualification should be required of all government employers and any employer which receives government funds or contracts. The degree standards should be rigorous.

This will make a university education available for free to any American who is willing and able to pursue it.

Aug. 16 2011 01:14 PM
Fix Intellectual Property Monopoly Abuse from stop paying more than other countries


(1) Stop paying more than other countries for the same goods.

Intellectual property - including patents,
copyright and trademarks - are government granted monopolies - which exist only for the public good to incentivize innovation.

Unfortunately, IP holders systematically overcharge U.S. consumers. A poor U.S. citizen pays more for medications, textbooks, DVDs, software, trademarked clothing than wealthy people in so-called developing countries (our competitors like India and China). This should stop. It damages our international competitiveness. Any IP monopoly holder who charges U.S. consumers more than consumers in other countries should lose their IP right in the U.S. (eg. the US should stop enforcing this government granted monoploy if it is abused).

(2) Tax IP based on U.S. sales regardless of where the IP ownership papers are held.
Google and others pay almost no tax. Why ? They transfer their IP ownership outside the US and transfer price to tax shelter countries. This unjustly robs the US treasury of revenue. Any IP *SOLD IN THE US &/or to US consumers* should be taxed in the US - based on the REVENUE from the SALE.
(Otherwise, companies can simply transfer all taxable revenues abroad and evade all US taxes).

Aug. 16 2011 01:05 PM
amalgam from NYC by day, NJ by night

There is no need to raise housing prices, rather there should be opportunities for homeowners to refinance there mortgages down to make them more affordable and keep people in the houses that can and want to be in them. At the same time, people that want to "drop off their keys" on an underwater house could be put on a fast track foreclosure process to get the house out form under them and onto the mortgage holders' balance sheet, ready for resale (this should NOT be mandatory).

In any case, the housing market needs to be put on firm footing and regional markets need to hit bottom so people have a reasonable idea of what houses in a given street, neighborhood, city, etc. are worth when either buying and selling. This will help stabilize the market, keep people in their homes, reinvigorate the real estate market both buying/selling, give homeowners a reason to makes home improvements since they know what their house is worth, and allow for people that don't want their homes a responsible and quicker way to get out.

Since the housing bubble was the primary cause of this economic meltdown in the US, and housing normally leads the way out of recessions (although not in this case), this shows a a way out of the morass.

Aug. 16 2011 11:41 AM
Avid from Western KY

We need to get Congress's mind back on the people instead of funding their next election.

Congressional Reform Act of 2011

1. No Tenure / No Pension.
A Congressman collects a salary while in office and receives no pay when they are out of office.

2. Congress (past, present & future) participates in Social Security.
All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress participates with the American people. It may not be used for any other purpose.

3. Congress can purchase their own retirement plan, just as all Americans do.

4. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.

5. Congress loses their current health care system and participates in the same health care system as the American people.

6. Congress must equally abide by all laws they impose on the American
people.

7. All contracts with past and present Congressmen are void effective 1/1/12.

Aug. 16 2011 10:16 AM
Mordecai Christi from Boston, MA - WGBH, 89.7 FM

Population decrease/sustainability. Too many people = resource-drain, occupational-impossibilities, and lack of actual property-available.
We charge higher taxes on fast-food, cigarettes and grant tax-breaks for those who (undiagnosed with glandular issues, etc) exercise and stay healthy.
We all put money in our own ways in to this society, our world - let's charge those who choose to be a greater drain. Equality, true.
Finally, for now, free education.
An intelligent society (bad for those in power now, who conserve their pleasurable-dominant-lifestyles, not our public interests, duh), is the best policy.
We learn ethics, we learn mathematics to understand the effect we all have en masse, the value of the human experience through art, music, plays, film, scientific advance in health, space travel, and metaphysics, etc -
its about efficacy, unity for human survival, and pleasure ultimately, when we are all safe and happy, we are -all- safe and happy.

Aug. 16 2011 09:39 AM
Bob from NYC

Jackie Mason probably had the best idea. Put all elected officials on commission. If the country makes money, they get paid, otherwise ...

This includes the president as well. Charge them market rates for their fancy offices and their government supplied homes and see how quickly the economy improves! :-)

Aug. 16 2011 09:27 AM

Boosting housing prices will do nothing to stimulate economies in areas whose housing prices are already too high. In areas like Los Angeles and Boston the housing prices have already made homeownership unattainable by many middle class Americans, which means the housing market remains stagnant and fails to stimulate the economy.

Aug. 16 2011 09:12 AM
mark

I think we should ask the bankers on wall street, big corporations and really rich people too chip in for a stimulus that will boost the economy which will benefit them too.

Aug. 16 2011 07:45 AM
Elizabeth from Brooklyn, NY

1. So-called free trade agreements are not revised to have real reciprocity;
2. Tax breaks continue to go to multinationals that ship jobs overseas;
3. Tariffs are not imposed on countries with which the U.S. has substantial trade deficits through currency manipulation, tax subsidies and other mercantilist policies;
4. People continue to do business with or buy products from large multinationals instead of small businesses;
5. A steeply progressive tax system is not enacted(despite the permission of Warren Buffet);
6. Antitrust prosecutions are not instituted against banking, insurance, pharmaceutical, agricultural, and media conglomerates; and
7. The social contract is not rewritten to provide for decent wages and medical care for all workers.

The list can go on.

Aug. 16 2011 07:45 AM
ken from Siam

The first thing you have to do is open up and audit the Fed so that we can see what they are doing and what is wrong with the economy. It would help to have a complete diagnosis of the problem before embarking on a solution.

Having legislators who have some understanding of economic issues and not tied to political rhetoric and interest groups who do understand economics.

Aug. 16 2011 07:27 AM
Steve from White Plains, NY

Bloomberg BusinessWeek reported that 30% of the nation's economy is controled by less than 1% of the nation's population. Warren Buffet said the tax code for the wealthy is rediculous. Why not have that 1% pay their share that control the 30% payup. They use the same resources we do.

Aug. 16 2011 07:26 AM
John Best from Massachusetts

Several related issues both involve our military. Many of us have mentioned that we need a new version of the WPA. Talking with people with much more information than myself explained that our present government doesn't have the money to support such a program.
Another issue for me, has been the continued drain of money due to our military involvement in so many conflicts. I was told that one of the reasons our military is kept "over there" is that our country would be overwhelmed with soldiers coming home with no jobs available.
Here's my answer. Bring our military home. They are still getting paid but put them to work doing repair/construction on our infrastructure. We would be saving so much money being used to support wars that will never be won that could be used over here.
Continuing to pay our soldiers to build at home, instead of destroying somewhere else should be a viable solution to a new WPA.
It doesn't help the job situation but adds another piece to the puzzle we have to solve.

Aug. 16 2011 06:28 AM
Ed from Larchmont

We have killed one third of our young people over the last 40 years, so the economic problems are predictable. For example, fewer people to buy houses and fewer houses built (in extreme it can be seen in Japan). We need to stop abortion and support famlies and women in order to have more young people since the problem is demographic. The other solutions are temporary fixes in comparison to this fundamental problem.

Aug. 16 2011 06:14 AM

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