Economics Stack Exchange Archive

Why can’t the government simply payoff everyone’s mortgage to resolve the housing crisis?

If the government could spend hundred of billions to save the banks, Fannie Mae, Freddie Mac, the automakers, etc. wouldn’t it have been better for the economy if the government had paid off everyone’s mortgage? That would have recapitalized the banks and removed the debt burden from people - and thus giving them more money to spend.

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