Not so fast! Usually when bank executives and politicians want consumers to spend more they suggest people should use their tax refunds, work bonuses or savings. This time home equity is the source being suggested to boost the economy.
That suggestion is an incomplete half measure.
Consumer spending is not a magic pill that fixes the economy, especially when the people doing the spending goes deeper in debt or uses all of their savings or equity.
The solution to a healthier economy lies in what puts more money into potential consumers hands to begin with:
“Make no mistake. Tax, regulatory, government spending and other governmental performance and cost measures matter state by state. They have real impacts not only on entrepreneurship, investment, small businesses and their workers, but naturally therefore on the overall economy of each state,” said Raymond Keating, chief economist of the Small Business & Entrepreneurship Council.
Home equity should be used as the homeowner sees fit when managing their own lifestyle. It shouldn't automatically be used to prop up the quarterly #'s of a retail store.
Mainstream finance news should focus more on actions that put money into the bank accounts of people, not what takes it away.