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[Joe Stocks]

Greenspan Favors Government Bailout for Homeowners (Update1)

By Steve Matthews

Dec. 16 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said he favors spending U.S. government money to bail out mortgage borrowers who risk losing their homes because they can't make payments.

Greenspan, speaking on ABC's ``This Week'' program aired today, said cash bailouts, while creating a larger budget deficit, have the advantage of helping homeowners without distorting property prices or interest-rates on mortgages.

``Cash is available and we should use that in larger amounts, as is necessary, to solve the problems of the stress of this,'' Greenspan said. ``It's far less damaging to the economy to create a short-term fiscal problem, which we would, than to try to fix the prices of homes or interest rates. If you do that, it'll drag this process out indefinitely.'' <<

http://www.bloomberg.com/apps/news?pid=20601087&sid=ae4kKgk4O4Ks&refer=home

Please excuse the language, but Greenspan is a real dumbass. Where does Greenspan think that US Government money comes from?? I wish someone would have asked him how that bailout plan would work.