What do you think of Walt's idea?
 

Walt wrote this letter today to send to the President, our Congressmen, the major news networks, etc. I doubt that they will use his idea, but you never know! It's certainly as good or better than anything any of them have come with so far. What do you think? Sound reasonable to you? Ok, here's the letter....................................

September 30, 2008

President of the United States
United States Senate
U.S. House of Representatives

Subject: Main Street Mortgage Mitigation Measure

Gentlemen and Ladies:

With all due respect, I would like to submit, for your consideration, my suggestion for an alternative relief plan for the financial crisis currently facing our country.

This plan would still require the disbursement of a very large sum of money, the same 700 Billion dollars estimated for the measure that was defeated Monday. However, rather that distribute the money to the financial marketeers on Wall Street, I suggest that the money be distributed in a more direct manner to the lending institutions with the stipulation that the money be used to assist the existing mortgagees with their payments. The money would be allocated to people for home mortgage payments on their primary residence, up to a maximum of $10,000 per mortgage, with the following priorities:

1. First, or primary, mortgages that are facing foreclosure, with the intent that the foreclosure action would be delayed by the number of months covered by the $10,000 payment.
2. First, or primary, mortgages with a principal balance equal to or less than $10,000; with the intent that the mortgage would be paid off completely.
3. First, or primary, mortgages with a principal balance greater than $10,000; with the intent to refinance, either reducing the monthly payment for the same term or shortening the term for the same monthly payment.
4. Second “home equity” mortgages on the primary residence, following the priorities listed above.

In theory, with the 700 Billion dollar funding and a $10,000 limit per mortgage, this measure would provide some relief for 70 Million mortgagees (or maybe more, depending on the number of mortgages paid off with principal balances less than $10,000). I don’t know how many outstanding home mortgages exist in this country; but if there are funds remaining after all eligible mortgagees have received the assistance described above, the fund balance could be distributed in one of the following ways:

1. Increase the allocation limit per mortgage, applying to the same listed priorities.
2. Do not use the leftover money, returning the money to the Treasury and thereby reducing the overall debt.

This measure would strengthen the economy with a “perk up” approach, rather than the “trickle down” theory that has not worked so far. By inserting the money closer to the grassroots level and reducing the mortgage payments that need to be made, you would be giving the average consumer more money to spend on other consumer items (like automobiles or appliances, for example). In turn, this would benefit the businesses that provide the goods and services to be purchased by these consumers. Furthermore, the lending institutions themselves would benefit from the payments made with the funding from this measure, being able to pass the money forward with new mortgages and other loans. In my humble opinion, this approach has the potential to be far more effective than any of the proposed tax rebates or “incentive” refunds I have heard of so far.

Of course, we consumers share your concerns over the handling of the nation’s financial markets, wanting to see better regulation of the people and firms handling our money. This includes avoiding further “risky” loans to people who are obviously trying to live beyond their means. Also, the pay and bonuses for the top executives responsible for the management of our money should be limited or tied to their effective, competent performance.

Please set aside the partisan rhetoric and posturing, and consider this or another reasonable and acceptable proposal for addressing this critical situation without further delay.

Respectfully,

(his name and address)

Re: What do you think of Walt's idea?
 

I do not know if it would be feasible or not (an Economist I am not) but kudos to Walt for putting his thinking cap on.

Re: What do you think of Walt's idea?
 

Agreed! :thumbsup

Re: What do you think of Walt's idea?
 

I think Walt is a genius, but I may be biased as he was smart enough to marry you. :)

Re: What do you think of Walt's idea?
 

:thumbsup :thumbsup

Re: What do you think of Walt's idea?
 

Awww shucks. I'm so honored. I'm blushing. :)

But just for the record, I've always KNOWN that Walt is a genius. Seriously! He is by far, the most intelligent person I have ever known! And to think that all of that intelligence could have been gone two years ago when he was without blood and oxygen for 105 minutes to his brain and other organs. ISN"T GOD AMAZING!!

Re: What do you think of Walt's idea?
 

LOL! it certainly puts thing in perspective!

Re: What do you think of Walt's idea?
 

I think the problem is, some of the guys trying to fix the economy are brain dead, (tic) kinda. :D

Thank you Jesus for healing Walt! I agree God is Amazing.

Re: What do you think of Walt's idea?
 

I have wondered why they don't help the homeowners rather than the companies but then maybe they felt that would have too much of a domino effect. But it seems like a good idea to me. Many people simply can't pay after a huge interest hike. Why not let these people refinance at a better interest rate rather than foreclosure?

Re: What do you think of Walt's idea?
 

Good ideas Walt.

Re: What do you think of Walt's idea?
 

One of the big problems is Walt assumes there are $7B to work with. Imaginary money is one of the things people are fighting as it will result in a further decline in the value of the American dollar and lead us in a big circle.

Also, are those people going to pay the government back if they get on their feet/sell their homes? The idea is this will end up being paid back if the deal works. they are not giving money away.

He is absolutely right about the whole trickle down thing not working though. At least he is trying though. More than it feels like our esteemed leaders are doing.

Re: What do you think of Walt's idea?
 

Jeremy, Walt said to thank you for your honest criticism. He does however want to point out that this imaginary money is just as real as the imaginary money that they will be giving out to the banks.

Also, there is no guarantee that the money will get paid back from the banks either.

I doubt that this letter will get very far with our esteemed leaders, but it is still worth sending.