Feds Must Ward Off Stagnation, Clinton Says

Says buying mortgages might be necessary to avoid prolonged skid
By Jim O'Neill,  Newser User
Posted Mar 27, 2008 11:15 AM CDT
Democratic presidential hopeful Sen. Hillary Rodham Clinton, D-N.Y., hugs her daughter Chelsea Clinton a rally at Daughters of the American Revolution (DAR) Constitution Hal in Washington, Wednesday.   (AP Photo/Lawrence Jackson)
camera-icon View 2 more images

(Newser) – The government should step into the mortgage mess on a broader scale, Hillary Clinton told the Wall Street Journal yesterday, suggesting monetary policy alone can’t ignite a recovery and warning that procrastination could lead to stagnation similar to Japan’s weary economy. Clinton said the Federal Housing Administration should buy troubled mortgages in combination with a program to auction defaulted loans.

Clinton and rival Barack Obama—who delivered an economic policy speech in New York today—have similar economic plans, although Clinton’s suggests a deeper governmental role in resolving the housing crisis—an approach criticized yesterday by Treasury Secretary Henry Paulson. Clinton is launching a six-day "Solutions for the American Economy" tour of North Carolina, Indiana, and Pennsylvania.