Cramer: Stop Deporting Illegal Aliens to Solve Housing Woes
Love him or hate, CNBCâ€™s Jim Cramer brings an interesting perspective to the debate about the fragile
On Nov. 5 the host of CNBCâ€™s â€śMad Moneyâ€ť detailed for his audience how he would save the economy serving under Democratic President-elect Barack Obama â€“ under the facetious assumption he could be SEC chairman, Federal Reserve chairman and Treasury secretary.
Under Cramerâ€™s plan, the government would bail out the big three U.S. automakers â€“ General Motors (NYSE:GM), Chrysler (NYSE:DAI) and Ford (NYSE:F) â€“ with a plan similar to the bailout of American International Group (NYSE:AIG), which was rescued earlier this year. Cramer would also give tax breaks to private enterprises that aid in the countryâ€™s transition from petroleum-based fuels to natural gas.
But one specific part of Cramerâ€™s plan could cause the biggest stir: halting immigrant deportation to increase demand for housing.
â€śObama must let it be known that there will be no more immigrant deportations,â€ť Cramer said. â€śLike it or not â€“ listen to me â€“ so that immigrants, legal and illegal, will stop being afraid to buy homes.â€ť
Cramer referenced a study cited by CNBC â€śStreet Signsâ€ť host Erin Burnett earlier in the day during the â€śStop Tradingâ€ť segment of her program. According to Burnett, the illegal immigrant mortgage payout is about 98 percent, versus a 92-94 percent range for mortgage payouts nationally.
â€śThe home areas that are, have been most decimated are exactly where the immigrants were buying,â€ť Cramer said. â€śItâ€™s a major not-talked-about issue. By the way, the immigrants default rate is almost nil as the wonderful and fabulous one [Burnett] said to me today at 2 oâ€™clock. These are the banks â€“ these are the people the banks want to lend to as they will take on fourth, fifth, sixth, seventh and eighth and ninth jobs to keep their mortgages current.â€ť
Cramer also proposed the government spend $400 billion on 1.3 million homes outright and â€śgive the homes to peopleâ€ť with 5 percent loans and low down payments â€“ or he proposed doing away with the home outright â€“ by burning them, similar to the FDR-era agricultural policies that stemmed oversupply in commodities markets.