My idea for economy.

Here is my idea for the economy, please help me improve it. What are your thoughts?

My idea for the economy is to invest this money where the rubber meets the road so we get maximum bang for the buck. The worst thing I think can happen is the banks get all this money and still foreclose on peoples homes. That would be double dipping. If we let the CEO’s skim off the top we won’t see much relief at the bottom. Why not put the relief at the bottom and let the effect move toward the top for a change?

The government comes up with criteria of debt we will accept.

Take all the debt from the banks and let them write it off their books.

Hire accountants to review the loans to make sure they meet the criteria.

Add the debt up so the legislation will have a price to it.

Return all loans that didn’t meet the criteria back to the bank.

Call the homeowner and ask how much they can pay.

See the good loans back to the banks.

Send the foreclosure to HUD.

The government comes up with criteria of debt we will accept. The people should only absorb loans that were government backed, where the bread winner lost their source of income or is now receiving less income and is not able to make their payment. The balloon payment loans and the ARMS should also be bought. Foreclosed properties due to above conditions should be taken off their hands. Small to medium business loans that are impacted by the economy hould be bought.

There are a lot of loans the government shouldn’t take since the banks benefited from their bad lending practices. If a bank gave $3 Mil for a vacant lot in Watts, that is the banks loan and should not be repaid by the people. If a ridiculous loan was made using stated income, or some other shady method, that is the lenders loan and should not be given to the people. If they gave a loan to a guy with no job, that is the banks bad debt. They received the fees, closing cost, and all the profits when they made these loans so they have been paid. We also need to safeguard against people who invest in real-estate from dumping their worst property investments on this program.


Take all the debt from the banks and let them write it off their books. Instead of buying the assets we should take the bad debt off the banks books which should give Wall Street the wiggle room to fix itself. We can take these loans without committing to a price tag which will give us time to come up with an exact figure before giving up one nickel. This makes it fair to all banks from the giant wall street back to the corner credit union.

Hire accountants to review the loans to make sure they meet the criteria. Hire accountants to review each loan to make sure it meets the criteria and so we can come up with a finite tally.

Return all loans that didn’t meet the criteria back to the bank. Again, the shady loans and bad lending practices that took place shouldn’t be bailed out. Instead we need to return those loans back to the banks. If the bank fails, oh well. The deserve to fail because they made bad investments.

Call the homeowner and ask how much they can pay. Some money is better than none and this is really a setup to get them to come in. Let’s give these people a new loan at a decent interest rate. Even if we have to stretch it out to 50 or 100 years it will save the homeowner and some money is better than none. We can set criteria like 35% of their current pay according to their taxes this year.

See the good loans back to the banks. Good loans can be sold back to banks a good rate like 80 cents on a dollar plus interest.

Send the foreclosure to HUD.


Lets see how we can improve this outline...

 

Good point, but if we let the bankers handle the situation that will take the money from the tax payers then foreclose on the houses so in effect they get both, the loan paid by the government and the property. Also, doesn't HUD currently perform a similar task?

Some of the people bought things they couldn't afford but I believe that is a small percentage (I could be wrong). I believe the bulk of these loans were taken by good, honest, hard working American's like you and I who fell victim to the economy. The last few years as we sent jobs overseas and had huge layoff's we at the same time created another family who couldn't pay their mortgage. It is not our job to bail them out but if we don't bail them out the economy will collapse.

True, the banks who gave out the loans and have lived high on the hog from the profits during the creation of this mess could be trusted to do the right thing on behalf of the homeowner. If that is the case, we'd have to create some kind of oversight board to make sure the American homeowner is not made further victim. I just thought it would be cheaper in the long run for the government to be the lender for a finite list of bad loans. They won't go in the business and will work to get these loans off the government asap.

 

True, I think both sides are are positioning themselves to benefit from these bucks.

 

One thing to note, I don't agree with the government competing against private industry.

 

Sorta... The government made it easier for low income people to get loans but they didn't create ideas like ARM's, balloon loans and the sub-prime market. They also didn't come up with things like stated income etc... All of those are products of capitalism and greed.

 

As you know, I can't present 1 to 1 figures since American companies don't employ the offshore workers. Workers in other countries are contracted through other companies. They also record many layoff's in this country as "downsizing" which mask offshore transitions. You know I could only present a number if we lost one job here and gained one job there.

However, in the 2004 election Kerry used the figure of 2.4 million manufacturing jobs alone had been offshored according to the department of labor. Again, this is a deceptive number since all offshoring is not a one to one job relocation and the number doesn't include service, research or technical jobs. This was also before the huge sucking sound from the Bush tax incentive to send jobs overseas.

True, many of those workers did find other jobs but generally at a lower paying salaries. It's hard to start at a new company making the same as you did with a company you spent 15 to 20 years. And, many people like the steel workers didn't have a secondary skill. This also means making less money since now you're considered unskilled labor. When you are trained in one trade, and that trade dissolves in your country, you must accept a lower paying unskilled position.

The unemployment figure we see is tainted because it only contains those who are still receiving benefits. Once you've done your 10 months (thanks to Bush extensions) of unemployment benefits, you will no longer be counted int he ranks of the unemployed. So the 6.1% is a very deceptive number. It really means 6.1% lost their jobs in the last 10 months. Now that Sir, is a lot of potential unpaid bills.

My Worldview is not a product of "class envy". I for one am very happy living by faith through grace knowing my God has and will supply all my needs. I am content and have no wants except to see Jesus. I do pray my bother can receive his daily bread and I hate to see any child without a roof over their head. So if you sense anger or a twisted world view from me, it is on behalf of my fellowman and against those who walks passed others in need on the virtual Damascus road.

 

I'm open minded, show me where I'm wrong...

 

Seems we need a way to clean bad laws off the books instead of just adding more to fix the broken ones.

 

My implication and analogy is about doing what you can for your fellowman. If you want to hide behind the pretense of disowning the government as "someone else" then I suppose you have that right. However, it seems hypocritical to belong when it comes to abortion but let it be someone else's when it comes to your fellowman in need. The Government can give $700 Bill to help the well to do on wallstreet so I see no problem with them helping one who is not well to do and could really use the help.

 

Wrong, the Government legislation created FHA who would back 80% of the loans in the event the homeowner defaulted. It was not an excuse to do away with good lending practices, it simply allowed the banks to take a little extra risk since 80% of the loan was federally guaranteed. The Government also set the base interest points but the lenders set their own profit margin over the base rate. The government didn't create ARM's, Balloon's or subprime. Subprime is so out there not even FHA would back those loans.