knox snooze

Succotash my Balzac, dipshiitake.

Over-the-hill mortgages

Daniel Drezner has some thoughts on the growing popularity and acceptance of the 40-year mortgage.
My gut instinct is that these costs are far outweighed by the benefits of expanding the number of homeowners. Beyond expanding the investing class, this is particularly true if the introduction of this kind of mortgage instrument creates new neighborhoods of homeowners instead of renters.
I am frustrated by the critics who claim this will create a larger debt burden on Americans, implying that we'll all go out and buy the most expensive house we can. Look, if my credit is good enough to buy a house and I have the requisite down payment and closing costs, then give me the benefit of the doubt and assume that I am also responsible enough to decide how to spend my own damn money.
I think that more widespread use of the 40-year mortgage means that we will have some people (more than we have now, I'm sure) getting in over their head, but it will greatly relieve the month-to-month financial burden that responsible homeowners bear. It only means more interest for banks, which is good for the economy, more home construction, which is good for the economy, more home ownership, which is good for the economy, and more homeowners who care about their communities, which translates into greater voter turnout, more responsible citizens, and reduction in crime.

Yes, I'm pulling all of this out of my ass, but it makes sense to you too.
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