it's been pretty hard to avoid all this news about economic bailouts and the failure of various large banks and investment corporations. your leaders are about to hand out $700B to banks who made and or bought risky mortgages. you are going to end up paying for it. i won't get into all the reasons why i think this is a bad idea, but i will propose an alternative.
the government buys any personal residences that are:
- upsidedown on their loans
- was listed on the market for at least six months and the sellers did not refuse any "reasonable" offers. (definition of reasonable is yet to be determined)
at which point, the government disposes of the house at market value, pays the mortgage company with the proceeds of the sale. the difference between the market value and the proceeds of the sale is loaned to the mortgage company by the government with interest. that same amount is added to the ex-homeowners tax bill at little to no interest.
why i think this is a good idea?
1) people who can't afford their houses have some motivation to get out of them and don't get to keep them. if i have to pay for my house so does everyone else damnit.
2) people who got in over their heads can get out, but still have to pay for it in the long run.
3) the banks don't get free money. they'll get some from the portion of the homeowners who are willing to accept the fact that they can't afford their house. they will eat some losses from stubborn homeowners who just don't care (i'd be interested in what the percentages would be). some will fold, which i consider a good thing to a certain extent.
4) the final bill will be paid for by the people who made the mistakes.
one of the problems with my plan is that it would take a while for their to be any effect and probably in the meantime, more institutions would go belly up. i'm generally opposed to government interfering in the free market, but on the other hand i'm not particularly a big fan of the idea of the entire american economy collapsing either.
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nerd
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