September 3, 2011
If there is a rule change that would put agency REITS out of business it would be detrimental to the US economy. The dividends no longer received by stock holders would not be spent on the economy.
If there is a rule change that would require agency REITS to be subjected to paying taxes as do corporations, it would benefit the Goverment with increased revenue, but the revenue most likely would be used to pay entitlement benefits and would not necessarily benefit the economy. Also, if the agency REITS pay income tax then the dividend pay out would be less and therefore, less spent on the economy.
It is more important that the economy benefit from the proceeds of the agency REITS. If the stock holder receives the benefits from the agency REITS the enconomy will benefit. If the Government receives the benefits from the agency REITS then only the Government will benefit and not the economy.
In this Nation's present situation it is more important that the economy receives all the benefits possible.