The economy took center stage Friday, as the symptoms of its collapse continued to run amok: the costly war in Iraq continued racking up debts, the sub-prime mortgage crisis had homeowners resorting to insurance fraud by way of arson and fuel prices hit $4 in parts of California and Hawaii. In an effort to stem at least one of those problems, Fed chairman Ben Barnanke announced that the Federal Reserve would take to help ease the number of bank foreclosures by prohibiting “loan-flipping,” the process by which borrowers are forced to pay higher interest rates when refinancing and by putting an end to “no-doc” loans, which allow applicants with enough up-front money to bypass verification of income and assets.

Nowhere in his remarks did Bernanke suggest a government buyout of threatened mortgages, but that didn’t stop Economic Policy Chairman Charles Schumer of New York from calling for one. The Democratic Senator also accused President Bush of “living on another economic planet,” because he won’t implement concrete measures to stabilize the economy.

President Bush acknowledged that there are “tough times” ahead for US taxpayers, but maintained that his economic stimulus package will somehow right the ship. The president called on Congress to implement changes to Federal Housing Administration loans, and government sponsored organizations like Fannie Mae and Freddie Mac, which buy up and resell mortgages.

A government buyout isn’t the answer, but neither is dumping $600 a person back into taxpayer pockets. Bush tried this strategy during his first term ($300 that time) and it had little-to-nothing to do with the re-stabilization of the post-9/11 economy.

The answers won’t come easy.

Regardless of how we got into the Iraq war, we’re there now, so ensuring the job is completed is essential. The housing market needs to be stabilized, undoubtedly. While I’m not convinced eliminating no-doc loans is the answer to the problem, I’m positive that a government bailout will only fan the flames (literally). As a licensed, non-practicing Realtor®, I can safely say that there are only a few ways to fix the problem and they aren’t quick. First, the mortgage industry has to be streamlined to eliminate extraneous penalties and costs, and second, tax incentives should be offered to banks and lending institutions willing to return to renegotiate failing mortgage loans. I won’t bore you with my idea for fixing the fuel crisis (since I did that Wednesday), but not even that is a quick fix.

With apologies to Sen. Schumer, there are no quick fixes. US taxpayers are going to have to take the few dollars the president is willing to give them and cross their fingers that it’s enough to pay down their debts. Only when consumers feel comfortable will their money flow back into the economy. Until then, we’re in store for some “tough times” indeed.