Say Yes to Foreclosure in this Economy (?)

I don’t agree but economist Christopher Thornberg thinks so. As quoted in the Mortgage Insider, he says:

“I argue… that foreclosures are good for the economy. If someone stops paying their over-sized mortgage on a deeply underwater house they have a lot more money to spend on things like iPods and clothes. So in a sense all these foreclosures are probably one of the things stabilizing consumer spending. That’s far more important to the economy than whether people pay off their mortgages.”

He continues…

“The financial meltdown is done… and what you call a financial meltdown I call a comeuppance. The banks are already screwed. I fail to see how trying to keep people mired in debt as a way to help banks is good social policy.”

Source: Mortgage Insider

Strong opinions. I look forward to your thoughts!