Congress should instruct the U.S. Treasury to issue to each American household a mortgage reduction voucher worth $7,500. There are about 100 million households in the U.S.A., so the total cost would be roughly the same as the proposed bailout of Wall Street investors and banks. Because these vouchers could be used only to pay off mortgages, these funds would greatly alleviate the current financial crisis which was caused by people being unable to make their payments. Thus, these vouchers will help the banks by helping the people, rather than hoping that by saving the banks the people will be bailed out. Think about it as trickling up, instead of down.
One may ask, why issue these vouchers to people who have no mortgage? For fairness' sake. Given that that the Congressional bailout is using tax payers' money, all tax payers should benefit from the program. People without mortgages could either use their vouchers as part of a down payment for a house--thus helping restore the housing market to good health and stopping the downward spiraling of the price of houses, one of the causes of the current crisis--or they could sell these vouchers to others who could use them to further reduce their mortgages. (That is, these vouchers should be tradable.)
Democrats should love these vouchers because they benefit all of us, and not primarily those who own shares in irresponsible banks or the banks' reckless management. Republicans should love these vouchers, as they are akin to the school vouchers libertarians have long favored on the grounds that such vouchers leave the choice to each individual. Indeed, people can use these vouchers to pressure their banks to renegotiate their mortgages and provide more favorable terms--lest they take their vouchers to another bank, get a better mortgage from it, and pay off the old, unfavorable one.
The main criticism against this idea will be that issuing such vouchers takes time, and the financial crisis is at the gate if not in the gate. However, like the 2008 stimulus checks, which were issued within a few weeks, mortgage reduction vouchers could be issued in a jiffy. Moreover, the firm knowledge that $750 billion dollars are about to be injected into the system is likely to suffice to keep afloat the financial institutions. And, if this sum is not large enough, instead of increasing the bailout to the banks, let's up the people's mortgage reduction vouchers.
Amitai Etzioni is a University Professor at The George Washington University, and the author of The Moral Dimension: Toward a New Economics. He can be reached at comnet@gwu.edu.
SHOW US THE MONEY
by William Greider
The Nation --- September 24, 2008
Taxpayers should wake up the politicians and ask them to tell Wall Street: "We want the same deal Warren Buffett got." The Omaha billionaire announced he is playing White Knight to Goldman Sachs by investing $5 billion in the endangered investment house. What a big-hearted guy. Buffett is an old-fashioned capitalist who invests in companies for the long term and I am a big admirer. But Warren Buffett did not get to be a billionaire by committing public-spirited acts of charity. He plays to win.
But the taxpayers don't have any deal. They are the naked investors in this drama, asked to put up many billions to rescue Wall Street firms with nothing more than a vague promise it will save the Republic. I am reminded of the oldest rule in the financial business: "Get it in writing." ..........
read the entire article >>>>>>>
http://www.thenation.com/doc/20081006/greider3
Yes we need to TURN OFF THE FAUCET on New Mortgages going Bad and people losing their homes! These people were USED to fill up Derivatives with Mortgages!
The DEMOS want only $150 Billion and to stage this! That is BETTER!
I hope it is staged so we can see how it operates, but we need BANK EQUITY for CASH from China!
So... Its a perfect solution, but unfortunately its too simple, it doesn't pay off the cronies, and most importantly, GOVERNMENT === FAIL!
Sigh...
Time for all lenders, banks and savings & loans to be thrown out of the residential mortgage business. The mortgage lenders have proven beyond any doubt that they are incapable of running that business therefore the federal government should nationalize it all. Not only can they not manage the mortgage market they have manipulated it and corrupted it to the point of destroying it. The federal government should be the only source of residential mortgages and they should be low to no interest mortgages. Low to no interest mortgages would allow people to pay off their mortgages instead of being constantly in debt.
Instead of a home that sells for $300,000 really costing $900,000 when interest is included it would cost closer to $300,000. The $600,000 difference could go into other more productive investments. Any resell of a home goes through Freddie and Fannie and a newly created Federal Home Loan agency. Second ( or 12th ) homes could be financed through the banks.
A stable housing market is essential to a stable economy and the current situation exposes all of the short comings. This was not an accident this was a plan carried out by people as dangerous to this country as enemies outside the country. The dream of home ownership vs. the dream of Yacht ownership. Is it going to be Main Street or Wall Street? Which do we value more in America? Time to decide.
Gotta love these "compassionate conservative" policies eh?
Reduce the mortgages to current market value even if the person is current on their mortgage. For the people in default this would possibly now become affordable and for those that are current this will give more expendable income. If a person has no financial gain by taking this option then give them a tax deduction based on a percentage of the value their house. Obviously there will still be foreclosures creating an inventory. List these at 80% current market value, attracting new buyers.
Freeze the trading on banks requiring assistance allowing them to adjust their book value as well as make the necessary changes to show profit.
I believe by doing this the people who now have extra income will spend more and in turn this stimulates business. For those that were in default, they now keep their homes and its one less burden on the tax payers.
There is no distribution of wealth possible if the common man fails.
From all RENTERS.
Can we get tax cuts?
From all SINGLE PEOPLE.
Can we get tax cuts?