...Alternative Shoreup Plan....aka/Relieve Washington Madness....
OT> I don't get all the fuss...other than it is the same 'ol political posturing and power plays we've seen so many times in the past, despite the dire consequences.
The bottom line on this bailout dilemma is that the people DO NOT WANT TO bailout the banks and forgive them of their bad debts, then pass the bill on to their children. That plan simply is not going to pass.
If, heaven forbid, it were to pass, what would be next? Miss some car payments and the government man comes to your house in the night, hooks up your car to a tow truck, then hauls it directly to a government auction, so the bank can get all its money? Yes, that seems absurd. And we are to believe that this is the best "PLAN" congress can come up with? Are we stupid?
The current alternative plan has some merit and deserves to be considered with the same vigor as the Treasury's plan. But how about blank sheeting this and get some more creative elements into the discussion?! A plan needs decided upon that is both effective to strengthen banks positions and is acceptable, palatable and affordable to the tax paying public.
Here are some WAY CHEAPER new concept elements that should be considered in a passable plan....that SHORES UP rather than bails out:
1. Set up a govt fund, whereby homeowners facing foreclosure can get guaranteed short-term loans and/or grants to bring them current.
2. Set up government backed homeowner mortgage insurance to keep homes from facing foreclosure in the first place...and restore the banker's confidence...reducing the need to foreclose.
3. Set up insurance for banks, regarding homes they do have on the books awaiting liquidation...guaranteeing the banks a "fair market value" for each home held.
4. Set up a "need based" federal home loan system to assist young buyers, first time buyers, low income and the underemployed to have first right of refusal on homes being liquidated by banks...and to be FIRST in line for HUD and other government backed and other "new concept" guaranteed mortgages.
5. Stricter regulations on home speculators (flippers) who remove affordable good-value housing from the market. A house must sit on the market for a minimum of x number of months (12?) before it is eligible to be purchased by speculators for resale within 2 years of purchase. We simply do not need this predator "industry" in America.
6. Overhaul the mortgage loan regulatory system, to assure that proper mortgage payments will be made as agreed, prior to loans being made, thus reducing the high-risk types of loans and virtually eliminating the sub-prime market. This plan element includes providing a paper trail showing evidence of sufficient sustainable income by would-be homeowners and/or appropriate mortgage payment insurances attached to the loan.
7. Homeowner Employment Compensation, whereby an employer pays into a fund which assists with partial direct payment of mortgage notes for employees either laid-off, had a salary reduction or had status reduced from salaried to hourly within the past year. Mortgage banks and related financial entities may be required to contribute a portion of profits into this fund, as well.
8. Allow private investors to provide bailout assistance to banks of their choice. Banks would issue new preferred shares of their company stock, complete with guaranteed "first out" dividend percentages, (proportionate to the investments made), based on profits...(when the bank's profits are restored to a minimum standard.)
9. Allow corporations to set up financial institutions for the purpose of lending money to banks, with a federal government guaranteed rate of return for corporations. Should banks fail to pay, corporations would receive immediate equity ownership in proportion to investments made.
10. Get the FED to provide near and long-term assurances of fixed low interest rates, so that banks may plan ahead in a meaningful way and not get blindsided by sudden sharp market fluctuations. Also place a limit on the amount of spread permitted on the overnight interest charged.
There's 10 elements of an alternative bailout plan. It took me like 30 minutes to come up with them. I refuse to believe that all the brainiacs in Washington can only think to buy up jammed up inventory from banks. That is an absurdly silly plan that has no chance of relieving the true ailments of this endangered economy.
On another note......the presidential candidates come to Belmont University, here in Nashville in a few weeks, for a town hall debate. I'm on the faculty there, but it is of course restricted to invited guests....made up of the press and the political elite.
I sure do have some questions I'd love to ask!
But that is another subject entirely.
Best wishes...
Rande Is |
