When the president was given a tour of the plant at the Bureau of Engraving and Printing and saw truckloads of blank paper unloaded at one door and truckloads of money leaving at the other door, he must have thought, “Making money is so simple—let’s spend it!” Rumor has it that during this month, August 17th or thereabouts, he will announce a forgiving of mortgage debt at Fannie Mae and Freddie Mac, the holders for the majority of mortgage debt in this country, for those whose home value has fallen below what they still owe. Millions of ordinary citizens will have a huge burden lifted from them, and the resulting load of debt will be transferred via taxes to those who acted responsibly and avoided risky investments in the first place. Read all about it here in this report by Reuters writer, James Pethokoukis.
One other scary thing about forgiven debt is that the Internal Revenue Service considers debt relief the same as income and will tax it. You can’t win for losing.