wulfenstraat
Posts: 160
Joined: 11/22/2008
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The best way to get us out of this recession is by fixing the housing problem, which will fix the job problem. [After all, we all know that the American Jobs Bill is essentially just a stop-gap measure that can't fix the economy, which is why Congress continues to balk, which simply allows Barack some talking points about the "Do-Nothing" Congress. Seriously, that's just game, a waste of valuable time.]
Here's the solution: Let's unleash thousands of dollars from every household, which presently feels financially constrained, so that goods and services can be bought again at normal levels. How? Let's have a TARP for homeowners. Let's express confidence in the American people. We did it for Wall Street; it's time to do it for Main Street.
Let's start with a simple fact: Freddie and Fannie bought most of America's home loans, am I right? If the loans go bad, Uncle Sam is on the hook. So, let's not let those loans go bad. Easier said than done, you think?
How about having Freddie and Fannie become a partner in ownership with the people who presently own the homes that are now underwater or nearing it. If Freddie and Fannie had a program where they would take partial ownership of a home (let's say 25% to 50%) with the present owners, then these owners would keep their homes off the overburdened housing market and, in addition, have more money to spend on a monthly basis in our local and national economy.
It's not only workable but a win-win proposition all around, including for the embattled Fannie and Freddie who have already sustained tremendous losses, especially since there's another huge stock of homes that may go into foreclosure and further worsen the housing market. As before and as always, a healthy housing market can save us from a recession, even the balance-sheet recession we're in.
When the original owners sell their homes in several years after the economy has recovered, Fannie and Freddie acquire the government's share of the equity in the home: the entire amount of our investment with a 6% cumulative interest or, if they prefer, our 25% to 50% ownership stake. (Home repairs, re-designs and additions are the original owners' contributions in the partnership of the home; after all, they get to live in the home and Freddie and Fannie, who are also owners, do not get to benefit in this fashion but benefit from the later improvements to the home.)
If the original owners ever want to buy their homes from Fannie and Freddie, as the economy booms again, they simply arrange to buyout their Uncle Sam at the fair market value. In this way, nobody gets something for nothing. Homeowners who stayed within their means won't feel so totally ripped off, as the present system makes us feel, which has been rewarding speculative buyers with lower interest rates than others who played by the rules.
Write Bernanke, who has run out of ideas and is begging for something to do to fix the economy. He'll tell you how he can make it work.
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How to Fix All of America's Economic Woes with a Simple... - 
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