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Stimulus Package to Involve Credit Issuance?

In a post explaining why the economy is down (consumer spending has been limited because people can't play shell games with their credit card balances and home-equity loans), I noted one possible solution: Maybe give everyone consumer credit - enough to stimulate the economy, but not enough to lead to excessive inflation.  Extend this credit until home values increase.  Then call in the credit, thus de facto forcing everyone take out a home-equity loan?  And then home that home values don't rapidly decrease?I was joking.  Well, Federal Reserve Chairman Ben Bernanke took the idea seriously.  In an article about a proposed new stimulus package, he was quoted thusly:"If the Congress proceeds with a fiscal package, it should consider including measures to help improve access to credit by consumers, home buyers, businesses and other borrowers," Bernanke said...continue to full post

Full post as published by Crime & Federalism on October 20, 2008 (boomark / email).