The two of them suggesting a bailout of house-owners by subsidizing the value of their mortgages opens up Pandora’s box. If there is a way, people will abuse the privilege, so the good old moral hazard would be the biggest issue in that solution. These solutions work only in ideal lab environment of academia – completely useless.

You can probably look forward to some “urban renewal” projects where some inner-city housing gets bulldozed to reduce supply. This gambit was used a couple of times in the UK on a smaller scale as part of social engineering projects.

Not sure about those new exurban tracts that used to be farmland… or jobs for the people who live there. I suppose they could be scarecrows?

“Obama has been working with his advisers so that the proposed $750-billion-and-counting package of tax breaks and spending on infrastructure, education, health care and unemployment insurance is ready to go on Day One.

There are currently about 10 million unemployed workers in the U.S. (The Bureau of Labor Statistics defines as unemployed those persons who didn’t work in the week of the monthly employment survey, were available for work and made an effort to find work in the previous month.)

“If we write a check for $75,000 to each of the unemployed, we won’t have anyone ‘unemployed,’” said former Treasury Secretary Paul O’Neill.

O’Neill did the math so you don’t have to. Each job “will cost $250,000, which doesn’t suggest much labor intensity for the dollars spent,” he said. “It makes me wonder if any of the planners or commentators are good at arithmetic.”

They’re not good at arithmetic. And one wonders about their facility with economics.

If putting people to work is the goal, we could get rid of all the heavy earth-moving equipment and go back to digging ditches with shovels.

Why stop there? If it takes one man two days to dig a trench three feet deep and 30 feet long with a shovel, how long would it take 100 men using spoons?”

http://globaleconomicanalysis.blogspot.com/

>> So let’s just write everyone a check for $75K.

President-elect Barack Obama has started warning that getting the country out of its current economic hole may mean trillion-dollar deficits for years to come — but Rep. Ron Paul has very different ideas.

“I think it’s just more of the same,” the former presidential candidate told CNN’s John Roberts on Wednesday. “I don’t think it’ll solve the problems. It’s turning the spending responsibility over to government rather than individuals, and that’s not the way you make an economy work.”

“To me it’s a philosophic problem,” Paul insisted. “Why are we spending all this money? … We cannot solve our problem by doing exactly the same thing that got us into this mess.”