A Real Solution

Discussion in 'Economics' started by PAPA ROACH, Jan 21, 2009.

  1. January 20, 2009


    A Real Solution

    I have written down a few points here, for a program aimed at helping to alleviate the financial Armageddon we are in. The current steps the treasury has taken have not focused on the problem, the underwater consumers. Throwing money directly at banks has not and will not relieve consumers, nor create new lending. The following points will recapitalize the financial institutions while giving much needed relief to consumers.

    · The government creates a loan program for indebted consumers to elect into, allowing a 0% interest rate.

    · The program is for current debt, dated as of X. Any debt created after X will not be eligible.

    · The consumer must qualify by meeting a certain ratio of debt to income under the 0% rate.

    · If the consumers opt into the program, it will be noted on their credit report and freeze any attempts at opening new lines of credit unless approved by the government agency, thus disallowing more leverage to be created by those opting in, until certain levels of principle are paid down.

    · Allow those opting in to consolidate mortgage and credit card debt into a single monthly payment of principle.

    Some of the immediate benefits of this program would be that it will:

    · Recapitalize the financial institutions from the consumer level as it pays off the outstanding notes.

    · Shore up real estate values by halting the high foreclosure rates.

    · Create extra savings that will be spent in the economy, saved/invested shoring up equity values, or used to repay the program debt off early.

    Desperate times call for desperate measures. With a little innovation, we can avert a catastrophe.

    Sincerely hoping for a real solution,
     
  2. May not be possible any time soon.

    Though Gummint desperately needs to stop the rot ASAP due to demands for tax receipts at both Federal and State level, it may not be possible.

    1. For the last several years, the US and the rest of the world operated under the false presumption that credit could be on an ever expanding track... finds out now it's not the case.

    2. The "credit margin"... those who borrowed and spent all they could.. are likely out of the marketplace for a decade or more.

    3. Other than an occasional bargain, the rest of us financial responsible citizens won't be goaded into significantly increasing our spending for any reason.. we'll just keep bopping along at our established pace.

    4. America, and likely the rest of the Western world, is on the cusp of a lifestyle change... that is, no more "pedal to the metal" when it comes to borrow and spend. Many cannot, others will not.

    5. It's likely we'll have to accept a much lower level of economic activity all around. Unfortunately that likely means accelerating and sky-rocket deficits (in addition to the bailout sums)... probably means financial implosion... more a matter of WHEN rather than IF.

    Greedy Gummint and Greedy Bankers have likely left us "no way out" other than virtual bankruptcy. :mad:

    Got gold?
     
  3. Rather have raw land. Gold doesn't feed cattle, grow grain or produce water. Can't build a house on gold. And in the case we somehow manage our way out of this situation, at least you can enjoy the land you own for hunting/weekend place.
     
  4. Land is reasonable too... so long as you have the cash flow to support the required property tax payments (which will likely increase sharply)...
     
  5. With an ag exemption, taxes are almost non-existant.
     
  6. Do you think such an exemption would be at risk? As the Gummints find reduced tax revenue all around, won't they tax "wherever they can"?
     
  7. Cannot rule out anything, but it has never happened before, including the great depression. I think it is written in law that they cannot fuck with ag axemptions. To keep the exemption however, you must either run cattle or grow something on the land.
     
  8. The time of low savings and high consumption is over.

    Lets deal with it.