Sensible bailout idea that will never happen

User Forum Topic
Submitted by kicksavedave on October 10, 2008 - 4:29pm

So I was listening to NPR today and callers were venting about this or that regarding the current "crisis" we're in. Most of them were just mad and venting. But one guy named "Magnum" had a seriously good idea, which is why it won't ever happen.

His premise was that no bailout which is paid for by the responsible (i.e. Piggs) tax payers should provide significant benefit to the irresponsible or simply greedy parties such as Wall Street or the Specuflippers, or gullible and greedy folks who simply bought a $750K house with a $47K salary thinking that would work out for them long term.

Instead, he proposed that the bailout concept be that neighbors of foreclosed houses be the ones who are allowed to buy them up dirt cheap at bargain interest rates, then rent them back out to the former homeowners who got foreclosed.

The foreclosee's get to stay in the same house for a price they can afford, but they no longer own them, as it should be. The banks on Wall St don't get bailed out and end up losing the equity difference between their irresponsible loans and the sweetheart deal that the NEW owners get. The real winners are the responsible owners who get to buy into investment properties dirt cheap, while keeping their neighborhoods intact and in some cases generating a monthly profit on their investments. Even at break even on rent vs mortgage, they get to build their own little real estate monopoly without tax penalty as a reward for being responsible through this whole craze.

All this would really require is an adjustment in the lending and tax rules that allow individuals who have excellent credit and a stake in the neighborhood to invest in properties that are being foreclosed on without making them pay investment style taxes on the deal. Possibly a little protection for this new batch of first time landlords. If the Fed has to step in to help these responsible folks with down payments to make the mortgage work compared to rents, then so be it. It would be an appropriate use of taxpayer dollars to help the only group NOT currently being offered any help by this hideous bailout. The only group that deserves any help here.

With a few details to be hashed out, this plan could really work, which is why it will never get proposed by anyone who has any authority to drive it through.

‹ Prices Prices ›
I like it. It's also
Submitted by kewp on October 10, 2008 - 4:47pm.

I like it.

It's also already happening, but its hedge funds and private equity firms that are buying up the properties for cash.

I also think the Fed should take over a big national bank and lend directly to consumers, with salaries as the collateral. I.e., your line of credit is determined by your reported income; which can be garnished if you refuse to make your payments.

I think we should go with the
Submitted by Wickedheart on October 10, 2008 - 7:07pm.

I think we should go with the Birk Economic Recovery plan. I got this in my email a couple of weeks ago.

The Birk Economic Recovery Plan

Hi Pals,

I'm against the $85,000,000,000.00 bailout of AIG.

Instead, I'm in favor of giving $85,000,000,000 to America in a 'We Deserve It Dividend'.

To make the math simple, let's assume there are 200,000,000 bon-a-fide U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billon that equals $425,000.00.

My plan is to give $425,000 to every person 18+ as a 'We Deserve It Dividend'.

Of course, it would NOT be tax free. So let's assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?
Pay off your mortgage - housing crisis solved.
Repay college loans - what a great boost to new grads
Put away money for college - it'll be there
Save in a bank - create money to loan to entrepreneurs.
Buy a new car - create jobs
Invest in the market - capital drives growth
Pay for your parent's medical insurance - health care improves
Enable Deadbeat Dads to come clean - or else

Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces.

If we're going to re-distribute wealth let's really do it...instead of trickling out a puny $1000.00 ( "vote buy" ) economic incentive that is being proposed by one of our candidates for President.

If we're going to do an $85 billion bailout, let's bail out every adult U S Citizen 18+!

As for AIG - liquidate it.
Sell off its parts.
Let American General go back to being American General.
Sell off the real estate.
Let the private sector bargain hunters cut it up and clean it up.

Here's my rationale. We deserve it and AIG doesn't.

Sure it's a crazy idea that can "never work."

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85 Billion 'We Deserve It Dividend' more than I do the geniuses at AIG or in Washington DC.

And remember, The Birk plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh...I feel so much better getting that off my chest.

Kindest personal regards,

Birk

T. J. Birkenmeier, A Creative Guy & Citizen of the Republic

PS: Feel free to pass this along to your pals as it's either good for a laugh or a tear or a very sobering thought on how to best use $85 Billion!!
=

Wickedheart wrote: So divide
Submitted by JustLurking on October 10, 2008 - 7:22pm.

Wickedheart wrote:

So divide 200 million adults 18+ into $85 billon that equals $425,000.00.
=

I think you need a new calculator...

I didn't check the math. It
Submitted by Wickedheart on October 10, 2008 - 8:34pm.

I didn't check the math. It was an email, just a joke and waaay too many zeros for me.......

Edited to add, oh yeah, you're right. That was bad. It was funnier before you ruined it for me. LOL

To complete what JustLurking
Submitted by ucodegen on October 11, 2008 - 1:25am.

To complete what JustLurking pointed out..

$85Bil divided by all adults 18+ (200mil) is $425, which may be a few tankfuls of gas at the current rates.. that is it..

Likewise $850Bil divided by all adults 18+ (200mil) is $4250. While significantly larger, I have no problem pulling out my checkbook right now. My only hope and concern is that it is applied properly. They may get back a few billion by clawing back the golden parachutes and excess enrichment of the CEOs and executives that ran some formerly good companies into the ground. This may not offset the cost much to you and me, but the message that it will send these CEOs is priceless.