Talk:Subprime mortgage crisis solutions debate

Is my letter an adequate citation?

To Farcaster (talk · contribs): You removed two paragraphs which I added, saying "... This would require a cited source other than a letter. If you find a published source that supports your view, please re-include.". Those paragraphs were:

If part of the problem is an excess of dollar-denominated debt, then having the Fed lend dollars or having the Treasury borrow and spend dollars just aggravates the problem. Instead, the Fed could buy enormous amounts of common stock on the auction market. (If ownership of common stock presents a political problem, then near-equivalents could be bought such as: mutual funds, stock index futures, warrants, and call options). Also it could buy commodity futures and options to exchange dollars for foreign currency. These purchases would raise the prices of these pro-cyclic assets which would increase the capital of those who still own them and the liquidity of those who sold them, allowing them to pay their debts and increase their expenditures. When the economy recovers, the Fed could sell these assets (hopefully at a profit).

Going forward, an objective standard for monetary policy is necessary to minimize future booms and busts. Since the value of the dollar is supposed to be backed by the Fed's reserve assets, the Monetary Base (M0, the dollar denominated liabilities of Fed) should be equal to the sum of the prices of the reserve assets. If the reserves fall below M0, this indicates that there is not enough money in circulation (credit is too tight). In this case, more assets should be purchased to put more money into circulation. On the other hand, if the reserve rises above M0, this indicates that there is too much money in circulation (credit is too loose). In this case, assets should be sold to take some money out of circulation.

My reference for them was Fed should buy equities, my letter to the Washington Times. Notice that this was not just a letter which I sent to them; rather it was a letter which they chose to publish on-line. And I am not citing as an authority to support a supposed fact, but as evidence that my position is part of the public argument. Since the Times published it, undoubtedly thousands of people have read it. So it is part of the public debate.

For further clarification of my position, you may see User:JRSpriggs/Optimal monetary policy.

The Optimal Monetary Policy is to achieve the maximal sustainable deflation of prices. The way to do that is to maximize the worth of the reserve assets divided by the monetary base.

Originally, I put the two paragraphs in the Subprime mortgage crisis solutions debate#Solvency section since they assume that the problem is an excess of debt (as in Irving Fisher#Debt-Deflation theory). JRSpriggs (talk) 07:41, 6 April 2009 (UTC)[reply]

I do appreciate your help on this article. However, we should not cite our own work. There must be at least one published economist or banker that agrees with you! Please find that person and we're good to go!Farcaster (talk) 15:13, 6 April 2009 (UTC)[reply]

You are right to say that I do have a personal bias in this issue since I arrived at this idea on my own, so it is my "baby". I am not very good at doing searches and my position on this issue is probably very far from the mainstream. However, I did find just one person who might agree with me on at least part of my agenda — Jörg Guido Hülsmann who wrote Deflation and Liberty. (I have not had time yet to read his book, just skimmed part of it.) JRSpriggs (talk) 03:52, 9 April 2009 (UTC)[reply]

Merge "lower interest rates" with "credit easing"

The Fed cannot act on one of these without acting on the other; they are two different names for (virtually) the same thing. JRSpriggs (talk) 08:00, 6 April 2009 (UTC)[reply]

Organization of article by subject or by view-point?

To Farcaster: You have organized this article by subject matter (aspect of problem and type of possible solution) rather than by view-point (Obama administration's approach, Republican alternative, China's method, EU's method, etc.). This leaves me at a loss as to where to put something like this

This financial crisis was caused and prolonged largely by government excesses in the fiscal and monetary policy areas, and continued excess as far as the eye can see will neither end the crisis nor prevent further ones.

from Valid Complaints About Spending by John B. Taylor. JRSpriggs (talk) 11:29, 11 April 2009 (UTC)[reply]

It could go under either the fiscal stimulus or credit easing topics. This article is mainly about solutions rather than causes; those are covered in the main subprime mortgage crisis article. If we organized say by Obama or China, you'd see a laundry list under each and wouldn't be able to do a clear pro/con study.Farcaster (talk) 15:34, 11 April 2009 (UTC)[reply]

OK. I put it under fiscal stimulus since Taylor seems to be giving a little more emphasis to the fiscal side in the reference. JRSpriggs (talk) 19:42, 11 April 2009 (UTC)[reply]

The lobbying study is not from the IMF

The section in the article on "Lobbying" cites a "November 2009 report from the International Monetary Fund." However, the report is not a publication of the IMF. The authors happen to be IMF employees. But the paper itself states "The views expressed in this paper are those of the author(s) only, and the presence of them, or of links to them, on the IMF website does not imply that the IMF, its Executive Board, or its management endorses or shares the views expressed in the paper." The report is an academic-style paper written independently by its authors. The article should not imply that the IMF endorses the conclusions of the paper. Bond Head (talk) 15:22, 11 January 2010 (UTC)[reply]

Fixed. Thanks for catching that.Farcaster (talk) 04:25, 12 January 2010 (UTC)[reply]

Where's the survey?

Isn't there some kind of survey of economists on these various issues. There are many individuals noted throughout the article, but I think it would be useful to see some poll numbers to get an idea of the expert consensus. 99.179.5.231 (talk) 18:32, 14 May 2010 (UTC)Jesse[reply]

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