Inflation Threatens and Evictions Loom

Two major issues dominated the news in late July: Inflation – whether it is, is not a problem or is likely to be one; and the prospect that millions of renters would be evicted from their homes as a federal moratorium barring evictions for nonpayment of rent expired. 

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The Department of Housing and Urban Development (HUD) has published details of the new “HOPE for Homeowners” program enacted by Congress several months (and a couple of massive financial industry bail-outs) ago. The program authorizes the Federal Housing Administration (FHA) to refinance up to $300 billion in under-water mortgages held by borrowers at risk of losing their homes through foreclosure.

Glum and glummer pretty much summarizes the continuing steady flow of dismal economic reports, capped last week by unemployment data that had economists straining for words to describe just how bad the situation has become.

If you needed more proof that the financial problems dominating the news are serious – as if the dizzying stock market declines we’ve been seeing aren’t sufficient to make that point – consider the number of analysts from all corners of the political spectrum who are saying that the $700 billion bail-out plan Congress has approved is just a “first step.” A $700 billion first step?

Battered, berated, bloodied and not entirely unbowed, the massive financial rescue bill aimed at stabilizing the economy and the financial markets finally won Congressional approval last week, and was signed immediately into law by President Bush. But if ever there was an illustration of the similarities between making sausage and laws, and of the chaotic mix created when partisan brinkmanship and presidential politics collide with a potential crisis, this was it.