Only the government could come up with a plan to steal the people’s money through taxation in order to buy worthless mortgages, mortgages worth much less than the underlying properties, so that those worthless properties would not face foreclosure.
How can this be done you asked? The government will first condemn a property that is facing foreclosure so that it can use its thieving power of eminent domain to claim that property. It will then “reduce the debt” on the mortgages. Of course that can only be done by thievery at taxpayer expense. This ridiculous strategy will supposedly “prevent foreclosure, blight and falling property values.” This has all the earmarks of a ludicrous protectionist program meant only to protect the city governments.
I could not make this up! Many cities around the U.S., especially those hardest hit by the government created housing bubble, will attempt to hold up by force a housing market that has failed. They will do this by thievery and extortion, and use taxpayer money for the transactions and mortgage pay downs.
This strategy was invented by law professors in order to give cities a way to fool the public into believing that once the local government steals these properties, and in the process purposely loses money, that all in the local housing economy will magically be righted and prices will recover.
City politicians in some cases want to use what they call “friendly condemnation,” which is simply a way to threaten upside down homeowners into dropping any objections to outright theft. In Irvington, N.J., Mayor Wayne Smith thinks this idiocy will save up to 1,000 homes. But at whose expense, and at what cost?
The next economic crisis is most likely just around the corner. Given that many politicians think that taking over private property that is worth far less than is owed, and that using taxpayer money to hide that fact is the answer, what will happen in the future when a real economic collapse takes place? Maybe the government at every level can just take over all properties in the entire country. That way, there really would not be a collapse at all because the government would simply buy everything and mandate that all prices remain in tact. What a coup!