By The Wall Street Journal
The relentless slide in home prices has left nearly one in six U.S. homeowners owing more on a mortgage than the home is worth, raising the possibility of a rise in defaults -- the very misfortune that touched off the credit crisis last year. The result of homeowners being "underwater" is more pressure on an economy that is already in a downturn. No longer having equity in their homes makes people feel less rich and thus less inclined to shop at the mall. And having more homeowners underwater is likely to mean more eventual foreclosures, because it is hard for a borrower in financial trouble to refinance or sell a home and pay off the mortgage if the debt exceeds the home's value. A foreclosed home, in turn, tends to lower the value of other homes in its neighborhood. When will the Mayor and Council realize that our whole economy and ways of life are in trouble? Perhaps that extra million was the message they need to realize how tough things are for the residents, it is an even better time to adjust course and rehab the gym with the money we now have, incurring NO NEW DEBT. The roof, walls, floors, plumbing and electrical system would be NEW. The pool would be repaired. The gym could be air conditioned. Billy could get his placque. A new theater could be added to the adjacent complex, if desired. The Senior Center could be expanded. All this with NO NEW DEBT. Contractors would still be working.