Short Sale Subsidizing - How Does This Help?

How many of you caught this recent decision by the Federal Government? If I understand it correctly, the government is now going to pay $1,000 to the first leinholder, $1,000 to the second leinholder, and $1,500 to the distressed homeseller to close a short sale instead of letting the property go to foreclosure.

Click here to read the New York Times article. While this will potentially help the homeseller's credit rating (versus a foreclosure), how does this help improve the economy? I welcome any and all insights