My idea for economy.

[LeBuick]

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...

 

[Pastor Larry]

Why not start with the constitutional justification for the government to be in the homeownership business? That seems to be a major flaw.

I also see no indication of where the government gets the money to buy loans. Isn't that the root of the problem to begin with? People bought things they didn't have money for? And now you suggest that the solution to it is to buy things that we don't have money for?

Why not tell the banks to solve the problem? They can do everything that is being done right here by the government. They can evaluate the loans and rewrite them. They can decide what is good and bad debt.

I see no reason for the government to get involved as you have laid it out here.

 

[North Carolina Tentmaker]

Honestly, I think that would work. The only problem is that you have left out the part where all the politicians involved skim money off the top and divert it to their pet projects and campaign donors. How can you expect politicians to support that?

 

[LeBuick]

Why not start with the constitutional justification for the government to be in the homeownership business? That seems to be a major flaw.

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?

I also see no indication of where the government gets the money to buy loans. Isn't that the root of the problem to begin with? People bought things they didn't have money for? And now you suggest that the solution to it is to buy things that we don't have money for?

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.

Why not tell the banks to solve the problem? They can do everything that is being done right here by the government. They can evaluate the loans and rewrite them. They can decide what is good and bad debt.

I see no reason for the government to get involved as you have laid it out here.

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.

 

[LeBuick]

Honestly, I think that would work. The only problem is that you have left out the part where all the politicians involved skim money off the top and divert it to their pet projects and campaign donors. How can you expect politicians to support that?

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

 

[Andy T.]

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.

You keep saying this, and so I would like to see proof. I don't doubt that some Americans have lost jobs due to overseas outsourcing and a general decline in the economy. I also don't doubt that most of those who lost jobs rebounded and found jobs elsewhere; otherwise we would have unemployment rates well over 10%. So I would like to see your proof that the majority of the mortgage defaults were caused by your stated assumption. As stated, it's not like the unemployment rate is well over 10%. It's more like 5-6%, so it appears that your repeated statements on this are just assumptions based on your liberal, socialist, class envy, hate-the-rich-guy, worldview.

 

[Revmitchell]

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.

You couldn't be more wrong.

 

[North Carolina Tentmaker]

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.

Well I don't know about linking the outsourcing to the mortgage fall out. I have lost my job twice now to foreign competition, once back in '97 and once this year. But I found other jobs and did not default on any loans.

I believe our government must bail these out, by bailing out I mean that the government needs to buy the bad debt, something that may or may not cost us money in the long run. The reason we need to do this is because without government interference many of these loans would never have been made in the first place. Fannie and Freddie were founded for that specific purpose - to encourage banks to loan money to people they would have otherwise refused.

This current financial crisis is not the result of capitalism and greed gone to far but of government interference into business practices. The long term solution is not more government oversight, but less.

 

[Jimmy Clifton]

The McKinney Plan

While I don't care for Cynthia McKinney, the Green Party candidate for President, her plan isn't bad.

1. Enactment of a foreclosure moratorium now before the next phase of ARM interest rate increases take effect;
2. elimination of all ARM mortgages and their renegotiation into 30- or 40-year loans;
3. establishment of new mortgage lending practices to end predatory and discriminatory practices;
4. establishment of criteria and construction goals for affordable housing;
5. redefinition of credit and regulation of the credit industry so that discriminatory practices are completely eliminated;
6. full funding for initiatives that eliminate racial and ethnic disparities in home ownership;
7. recognition of shelter as a right according to the United Nations Declaration of Human Rights to which the U.S. is a signatory so that no one sleeps on U.S. streets;
8. full funding of a fund designed to cushion the job loss and provide for retraining of those at the bottom of the income scale as the economy transitions;
9. close all tax loopholes and repeal of the Bush tax cuts for the top 1% of income earners; and
10. fairly tax corporations, denying federal subsidies to those who relocate jobs overseas repeal NAFTA.
11. Appointment of former Comptroller General David Walker to fully audit all recipients of taxpayer cash infusions, including JP Morgan, Bear Stearns, Fannie Mae, Freddie Mac, and AIG, and to monitor their trading activities into the future;
12. elimination of all derivatives trading;
13. nationalization of the Federal Reserve and the establishment of a federally-owned, public banking system that makes credit available for small businesses, homeowners, manufacturing operations, renewable energy and infrastructure investments; and
14. criminal prosecution of any activities that violated the law, including conflicts of interest that led to the current crisis.

 

[LeBuick]

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

nationalization of the Federal Reserve and the establishment of a federally-owned, public banking system that makes credit available for small businesses, homeowners, manufacturing operations, renewable energy and infrastructure investments; and

 

[LeBuick]

Fannie and Freddie were founded for that specific purpose - to encourage banks to loan money to people they would have otherwise refused.

This current financial crisis is not the result of capitalism and greed gone to far but of government interference into business practices. The long term solution is not more government oversight, but less.

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.

 

[Ps104_33]

Why not start with the constitutional justification for the government to be in the homeownership business? That seems to be a major flaw.

Constitution? What's that?

 

[LeBuick]

You keep saying this, and so I would like to see proof. I don't doubt that some Americans have lost jobs due to overseas outsourcing and a general decline in the economy. I also don't doubt that most of those who lost jobs rebounded and found jobs elsewhere; otherwise we would have unemployment rates well over 10%. So I would like to see your proof that the majority of the mortgage defaults were caused by your stated assumption. As stated, it's not like the unemployment rate is well over 10%. It's more like 5-6%, so it appears that your repeated statements on this are just assumptions based on your liberal, socialist, class envy, hate-the-rich-guy, worldview.

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.

 

[LeBuick]

You couldn't be more wrong.

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

 

[TomVols]

I posted my response in the economics/finance forum.

One thing we should definitely do is get to the root of the problem. A start? Repeal or at least fix Sarb/Ox and the mark to market issues.

 

[LeBuick]

I posted my response in the economics/finance forum.

One thing we should definitely do is get to the root of the problem. A start? Repeal or at least fix Sarb/Ox and the mark to market issues.

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

 

[Andy T.]

I do pray my brother 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.

And of course, your implication is if you don't think helping the poor through other people's money (i.e., the government) is the best means to do so, then you are not as compassionate as those who like yourself.

To compare liberal ideology to that of the Good Samaritan, you would need to change the parable a bit. Instead of the G.S. using his own money to help the victim, he would first go take some money from someone else, and then help the victim with that. In the real parable, the G.S. showed conservative principles by helping the man with his own resources, not someone else's.

 

[Revmitchell]

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.

Wrong. Those are the mechanisms that allow people who are not actually credit worthy to get loans. Without those mechanisms there would be no subprime loans.

 

[LeBuick]

And of course, your implication is if you don't think helping the poor through other people's money (i.e., the government) is the best means to do so, then you are not as compassionate as those who like yourself.

To compare liberal ideology to that of the Good Samaritan, you would need to change the parable a bit. Instead of the G.S. using his own money to help the victim, he would first go take some money from someone else, and then help the victim with that. In the real parable, the G.S. showed conservative principles by helping the man with his own resources, not someone else's.

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.

 

[LeBuick]

Wrong. Those are the mechanisms that allow people who are not actually credit worthy to get loans. Without those mechanisms there would be no subprime loans.

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.