The Feds want us to bail out Wall Street. This makes no sense. It leaves taxpayers in the hole and does absolutely nothing for the millions of homeowners who are in foreclosure. One would think that there is a way to help business and banking and help all the folks you bought into the American Dream.
I think there is. Let's call it "Trickle Up."
First, take that 700 billion (probably less) and pay up every bad home loan in the country. No more toxic loans. Next, a institute a 1 or preferably 2 year moratorium on house payments for single family residences or even small residential income properties where a unit is occupied as a residence by the owner. At the end of that period, all of the loans are renegotiated based on the then current value of the property at reasonable (that is, government regulated) interest rates. If some loans require balloon payments, put them 10 or 15 years out, so the market recovers and people can prepare. The moratorium allows people and businesses to get back on their feet. It does not provide a safety net for those who worship avarice; no golden parachutes. Yet it would still put truckloads of cash into the system. Give the taxpayers a stake in the paid up loans. It would restore confidence on Wall Street, but more importantly , it would restore faith in the system in the heartland. It would give a hand to everybody's hurting neighbor. It would say. "You're not heavy. You're my brother." It is about healing the problem, one mortgage at a time. It would work.
It would be a solution of, by and for the People. I would imagine that would be an easier sell for our Congress.
And by the way, if this, or something like it, were to be done, what effect would it have on the World's view of America? Hmmm...? People come first. We are our brothers keepers. Gee, wouldn't that be a change.
This may not be the only way, but it is a start. Unless you can come up with a better idea, send a link to this to everyone you know. Send it to your Congressman and Senator. Heck, send it to Paulson. Have them start thinking outside the establishment box.