Sometimes, the forest must burn

To the editor:

Our economy is in a tug of war between the free-market capitalism that made our country the wealthiest on earth and the government policies that threw it into chaos.

The well-meaning but misguided attempts of the past few decades to make homeownership available to those who otherwise could not afford it have backfired, shattering the dreams of many of those they intended to help.

The good news is the free market is still attempting to fix the problem. The bad news is people in both political parties are fighting the forces of capitalism.

Capitalism is meant to ensure that institutions that continue on a path toward failure ultimately will fail. Thus, our financial institutions have tightened credit standards, ensuring that property will go back into the hands of those who can afford to keep it. Other businesses that refuse to adjust their failing policies are, and should be, failing. Our government is responding by propping up these failing institutions with borrowed money, prolonging the agony of recession.

We can learn from another failed government policy from our not-too-distant past. It had been the policy of the U.S. Forest Service to extinguish fires caused by lightning strikes, denying nature its ability to cull the diseased trees and overgrowth, providing nutrition to the stronger and more established trees and encouraging new growth. They now occasionally let the forest burn, knowing that the alternative could be cataclysmic.

Today, our leaders are extinguishing the fires of capitalism with the sweat of our children. As painful as it may be, for the sake of our future, we must, at times, let the forest burn.

Matthew L. Kinney

BOULDER CITY

Attack foreclosures

To the editor:

The federal government needs to get foreclosures, the source of the economic downturn, under control -- and fast. So far, top-down financial gerrymandering hasn't accomplished much, at least not for the 70 percent of the economy that actually spends the money which eventually creates the entire economy.

Rather than spend hundreds of billions, if not trillions, of dollars on what may or may not work, why not spend that amount or less on stopping the acceleration of home foreclosures, the root cause of the problem? The gist of the proposal is to have the federal government offer to refinance mortgages that were in near-foreclosure status with 1.5 percent, fixed-rate mortgages. The majority of home foreclosures have resulted from the high cost of the adjustable interest rate resets, so this should stop many, if not most of these foreclosures. Then, in order to make this unprecedented use of taxpayer money more palatable for almost everyone, for a fixed period of time all homeowners would be allowed into this program but at a slightly higher interest rate.

Half a trillion dollars would refinance 2.5 million homes, each with a balance of $200,000. Refinancing existing mortgages from their current interest rates of 5 percent, 6 percent, 7 percent or higher to 1.5 percent would not only dramatically reduce foreclosures, it would free up huge amounts of capital for individual homeowners to save and spend. Lower-interest mortgage financing also could be obtained by homeowners who already own their homes outright, and new home buyers would qualify more easily, thus propelling the remodeling and construction industries out of their doldrums.

In addition, this one-time government financing would return $500 billion to banks and private investors who would, in all probability, boost the economy further by investing these funds elsewhere.

Why should the federal government continue to give banks money at next-to-nothing interest rates when they seem to be doing next to nothing for the economy? Cut out the middle man for now. For a good time and a better future, you should be able to call your local federal reserve bank and reserve your low-interest loan soon.

Richard Rychtarik

LAS VEGAS

They're terrorists

To the editor:

The Review-Journal published Associated Press coverage of the Middle East that described the Palestinian terrorists who broke the latest "truce" with Israel as "militants," and that "[m]ost were members of Hamas security forces."

Why aren't you willing to report the facts? Hamas, a terrorist group "elected" by Palestinians to "govern" Gaza, is committed to the destruction of Israel and Jews. As such, they do not recognize Israel's right to exist. What more needs to be said about "peace negotiations" with an enemy committed to your destruction?

Hamas provoked this and all wars with Israel, and got it. So be it.

Randall Bassin

HENDERSON