Economists: Government rescue misses heart of problem

While the federal government’s plan to buy a stake in major financial institutions is expected to help rejuvenate the U.S. economy, many experts are critical that it fails to stem the high rate of foreclosures and low demand for homes that are the root of the nation’s problem. The rate of mortgages that were 30 days past due or more has been steadily increasing, reaching 5 percent at the end of the third quarter, according to Moody’s Economy.com. One economist proposes that the federal government replace 20 percent of U.S. homeowners’ mortgages with low-interest loans.

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