WHAT AMERICA CAN DO TO AVOID A DEPRESSION
A plan offered by a concerned citizen
A plan offered by a concerned citizen
I believe the following plan should be implemented immediately if America is to avoid a long-lasting recession or even a depression.
THE PLAN:
The US government offers every US citizen
a 30-year mortgage at a 1½% fixed rate of interest.
a 30-year mortgage at a 1½% fixed rate of interest.
All financially qualified US citizens, not just those in immediate danger of default, would be able to finance a new or existing primary residence, with a $500,000 lifetime limit of government capital for everyone.
Right now, the US Government is lending money at low interest rates to many companies. Why not lend it directly to the people?
Right now, the US Government is lending money at low interest rates to many companies. Why not lend it directly to the people?
Why the plan will work:
It will stop home prices from falling.
It will prevent most foreclosures and turn the housing market around.
It will let everyone save and spend more.
When the US Government refinances a 7% mortgage at 1½%, it will cut your monthly payment almost in half. On a $200,000 loan, the payment will decrease from $1,330 to $690. And when you save or spend that extra $640 each month, it will stimulate our economy.
It will increase credit availability.
As existing mortgages are paid off with lower rate government loans, the holders of those mortgages will have a cash inflow that will allow them to make new loans to people who, because of lower mortgage payments, will now be qualified to purchase other things on credit. Instead of a trickle down plan to stimulate the economy, this is a trickle up plan that moves funds into the financial system by starting with the people.
It will create jobs.
With increased credit availability and more money being spent, companies will decrease layoffs and expand new job creation.
It will increase tax revenues.
Government tax revenues will increase for two reasons. First, taxpayers will have a smaller interest deduction, because they will pay less interest on their mortgages. Second, as the increase in spending and credit availability stimulate the economy, tax revenues will increase over time.
It will not increase the deficit.
This is a government loan program—not an increase in government spending—so the money will be repaid.
It will reverse the economic decline now underway.
Saving people’s homes while increasing consumer spending and solving the financial industry’s credit crunch will stimulate the economy, resulting in increased tax revenues and a reduction in the deficit. We also believe this plan will increase home values, which will offset some of the financial losses experienced during the past few months..
It will reduce the losses of mortgage holders.
In order to work, the plan would require the government to oversee the refinancing of existing mortgages in a way that takes account of falling market values. The new loans will keep many near-default citizens in their homes; and even though lenders may take losses during the refinancing process, the forced fire sales will end, which will let them reclaim a larger percentage of their capital investment.
It is better than what Washington politicians are doing now.
Although it is possible to poke holes in anything, the foundation of this plan is sound, which is why it will do more than anything being discussed in Washington to turn the economy around quickly and promote prosperity for the coming decades .
It can be implemented immediately.
This plan should be implemented immediately, because the economy is getting worse each day. Washington politicians doled out billions of dollars to big corporations over a weekend. So they should be able to put this plan into action in 30 to 90 days.
US citizens deserve and need this plan.
The American people who helped build this country deserve and need a plan like this—a plan that will help them directly while also stimulating economic prosperity, just like the GI Bill did after World War II.
It will prevent most foreclosures and turn the housing market around.
It will let everyone save and spend more.
When the US Government refinances a 7% mortgage at 1½%, it will cut your monthly payment almost in half. On a $200,000 loan, the payment will decrease from $1,330 to $690. And when you save or spend that extra $640 each month, it will stimulate our economy.
It will increase credit availability.
As existing mortgages are paid off with lower rate government loans, the holders of those mortgages will have a cash inflow that will allow them to make new loans to people who, because of lower mortgage payments, will now be qualified to purchase other things on credit. Instead of a trickle down plan to stimulate the economy, this is a trickle up plan that moves funds into the financial system by starting with the people.
It will create jobs.
With increased credit availability and more money being spent, companies will decrease layoffs and expand new job creation.
It will increase tax revenues.
Government tax revenues will increase for two reasons. First, taxpayers will have a smaller interest deduction, because they will pay less interest on their mortgages. Second, as the increase in spending and credit availability stimulate the economy, tax revenues will increase over time.
It will not increase the deficit.
This is a government loan program—not an increase in government spending—so the money will be repaid.
It will reverse the economic decline now underway.
Saving people’s homes while increasing consumer spending and solving the financial industry’s credit crunch will stimulate the economy, resulting in increased tax revenues and a reduction in the deficit. We also believe this plan will increase home values, which will offset some of the financial losses experienced during the past few months..
It will reduce the losses of mortgage holders.
In order to work, the plan would require the government to oversee the refinancing of existing mortgages in a way that takes account of falling market values. The new loans will keep many near-default citizens in their homes; and even though lenders may take losses during the refinancing process, the forced fire sales will end, which will let them reclaim a larger percentage of their capital investment.
It is better than what Washington politicians are doing now.
Although it is possible to poke holes in anything, the foundation of this plan is sound, which is why it will do more than anything being discussed in Washington to turn the economy around quickly and promote prosperity for the coming decades .
It can be implemented immediately.
This plan should be implemented immediately, because the economy is getting worse each day. Washington politicians doled out billions of dollars to big corporations over a weekend. So they should be able to put this plan into action in 30 to 90 days.
US citizens deserve and need this plan.
The American people who helped build this country deserve and need a plan like this—a plan that will help them directly while also stimulating economic prosperity, just like the GI Bill did after World War II.
Contributor and spokesperson: Dennis F. Paulaha, Ph.D. Economics
603 comments:
1 – 200 of 603 Newer› Newest»Another solution: All U.S. citizens who purchase a new U.S. made car with a cost over $30,000 will receive a 20% discount on that car, i.e. on a $30K car you receive a $6,000 discount. If we figure the government will pick up the $6,000 cost on the car then the government could spend $24,000,000,000 on the project. This would pay for ($24 x 10**9)/($6 x 10**3) = 4 x 10**6 = 4,000,000 cars. One could either have a raffle to see who the lucky 4 million people are going to be or could do it on a first come first serve on an internet site which has a lot of servers. The auto dealers would sell 4 x 10**6 cars at $30 x 10**3 or have a sales of $120 x 10**9 dollars and the some citizens get the equivalent of a huge tax break. The states would get a lot of taxes on the cars, etc. It only cost the government $24 x 10**9 which they won't get back from the car companies anyhow. Problem solved. W**2, Ph.D., Emeritus Prof. of Theoretical Physics.
Investing in the American people is the number one solution to the economic crisis that we're in. Lowering the interest rate is a great idea as part of the solution. If my mortgage payment was cut in half I would save part of it but also spend it to perhaps buy a "green" car, to do some home improvements, to travel...The other key would be to enact legislation to provide universal single payer health care. This would save businesses and citizens money and lead to a healthier country. But we have so much work to do and lowering mortgage interest rates is a good first step.
Hear! Hear! Finally someone has a plan that is based on sound judgment and not GREED! A plan based on WE THE PEOPLE FOR THE PEOPLE!!
Why People, are we in the hole like we are now? Greed! Beginning at the top, the White House and this past 8 year lame excuse for leadership for the people by the people give a dog a bone! The Cheney/Bush administration has been all about me me me and what they can pocket into their bank accounts and oh yes we cannot forget their friends and cohorts, from Wall Street, big business buddies, bankers and the oil CEO's ETC ETC!
I can tell you this I make less than $12ph,I work a 40 hr week, I have and still pay for or support 3 dead children, \one luckily is still alive and a disabled husband with several degrees and one Degree in Computer Science, yet he can't work now. I a degree in Hospitality yet I am at the poverty level. All this can be topped off;I work daily with a chronic back injury thanks to a former employer who stole money from my paycheck and never filed a WC claim. I did and now I am paying the price and I cannot even sue them for a penny because I went to Workman's Comp begging to see a doctor. Of course we have no health insurance because my so called rich small family owned company can't afford insurance!
Our credit card bills are killing us. We were doing fine until we ran into health and medical problems. BUT Who is there to bail us out? No one and yet now my taxes are going to pay for those CEO's salaries while they play in their golden palaces with vacations to Timbuktu, astronomical retirement funds! Please, my laughter cannot take anymore of this! Why,I have not been on a vacation since before 2001, we live in a manufactured home because we could not even afford a stick built home when the houses were astronomical in cost. Now our tin can is worth less than our mortgage! But one good thing, we own a weenie teensy bit of American land! HA - Small enough that one of those CEO's could fit his dog house on! Man ya' gotta love capitalism in the American 21 century!
This is a GREAT idea. It is simple, straight-forward way they can help the taxpayers of this great country. I am bitter and angry that our government is helping businesses to prevent failure. What about the common man?
You are spot on! Let's make this happen. Its consumer spending that will drive job and wealth creation. How can we make this a reality?
This solutions is "Right on the money." Now, let's hope this spurs some fast interest and action in Washington, and that something gets done soon.
Great idea...
But who do you think is actually
going to be willing to rock the
boat enough to spearhead such a
plan? You'd need and army....
Hmm...perhaps an army of people?
But people are sheep and don't
want to get of their couch.
You needed to include a REAL way
for all who agree to make some
progress with this idea.
As it is now it's just an ad in
a newspaper. What exactly are YOU
going to do with all these replies????????????????
How does telling folks to go here
actually get us any closer to
making this happen?
Respectfully,
Ron
Great Idea!
Unfortunately, it is much to simple to expect the boobs in Washington to even give it the time of day. They know only one thing: Tax them some more!
Thanks for creative thinking, though.
Bill
Very good idea. I only hope someone in Washington can act on this plan. As stated in this article every homeowner that saves half on thier mortgage, would in turn spend some or all of the savings!!!!
Love it! We could even incorporate this plan with the automakers bailout. What if you also have to commit part of your savings to the purchase of a new car at some sort of employee or discount pricing program. A win/win for all. The idea is sound, now we need to come up with a plan of action! If not, the money will be distributed, but you and I will receive none of it.
Next steps?
I believe that many of the proposed arguments have merit. I, for one, would use the savings to pay off other debt and to increase our level of retirement savings, which has been cut in half due to the economic crisis.
My concern is that this proposal does not account for the lost revenues earned by the financial insitutions from the mortgages currently held that are not in default. Sure the cash inflow can be used to generate other sources of revenue, but that needs factored into the plan.
This is a great idea. Do you plan to bring this idea to Congress? I admire T Boone Picken's personal initiative to promote investment in renewable energy and hope that you can follow suit. We need more than a blog.
This plan is the only one so far that addresses the main injustice of the current economic malaise plaguing America--how many of you out there have followed all the rules, continue to make your mortgage payments by any means necessary, and have seen your overall net worth decimated, while you work harder and harder and harder? This is the only plan put forth to date that addresses the losses suffered by this majority group of Americans, who would also be the primary stimulus to the economy from the windfall in disposable income this plan would generate. It is brilliantly simple, promises a broad impact, and benefits the full spectrum American workers.
I agree completely with this approach. It is sensible on all counts. It is much more elegant than the current attempt by the "leadership" of financial institutions to pilfer even more money from the public coffers. An additional measure that would help prevent future issue would be to outlaw the Federal Reserve and return monetary control to the Federal government.
Great idea!!! I support it. One way to help America get out of this great recession. It would free up money for purchases and paying down debt. I hope our leaders in Washington take a look at this plan.
This seems like a very good solution. You need to get TV media attention, because Congress won't listen to one person and a bunch of bloggers. They are interested in helping their rich buddies on Wall Street -- believe me, I deal with Congress weekly. They're interested only one thing -- in who can get them reelected and money talks. Actually, Dennis, you would have received more attention giving 100 Congressmen $12,000 than taking out a full page add in US Today. You have my support, for what it's worth. Go gett'em and good luck!
Ken
This idea seems to be going around the water cooler like wild fire. The concept of support the american tax payer directly verses the company is something that many of my friends and I have talked about since the first mumblings of a bailout plan.
Here is the million dollar question, How do we get our representatives in Washington to listen to what "we the people" want to do with our tax payer money?
Your plan is very substantive, but it lacks foresight for the following:
FIRST - Who/what administers the idea? Banks? Should there be an Administrative fee?
SECOND - What are the plans for the percentage of defaults that WILL happen. An insurance fee tacked on to all loans!
Interesting idea however, what is to prevent this from becoming an even bigger debacle than the one we are already in? If the government is doling out loans what is to say they won't continue to give loans to people who don't deserve them and won't repay them. With lower interest rates you might just end up with the same people who bought houses they couldn't afford buying even bigger houses they can't afford. This could also create another bubble in the housing market as the price of houses is driven up by the extremely low interest rate. I wasn't for the corporate bailouts. The idea has some merits but I think it also has some issues. I don't trust anyone in the government to be capable of screening people to determine if they deserve a loan or not - or if they can repay. I see this as a potential Fannie/Freddie 2.0 only bigger.
What a great idea!! It would start a whole series initiatives. How do you get it started?? I always thought that extending the term of the mortgages would help, but this is much better.
I only wish we could trust everyone to do the right thing.
MEB
I think this plan should be implemented immediately. If you think about it, a secure home for us hard working tax paying Americans goes a long way. If our homes aren't secure our health then becomes in jeopardy and then our jobs. It's a trickle down effect. The security of our homes stretches way long into our economy. I vote "Yes", If it was only this simple...
There has to be some guidelines; such as only one of these mortgages per person to prevent abuses. (Primary homes only) The spectulators/investors are the ones that helped fuel this debacle so they will do traditional loans.
MEB
Intriguing; imaginative. While your plan has a great ring to it (I for one would love to have a significantly lower mortgage pmt), I’m concerned about the downside – as you said, holes can be poked. I’m not an economist, but do know something about finance. While the statistics on mortgage delinquency and foreclosures are staggering, it’s still like one in ten, isn’t it? Regardless of the accuracy of my memory, what does your plan provide the lender institutions for the 9 out of 10 loans that are not delinquent? It seems to me, implementing your plan, would devalue all the loans out there that are in good standing – like mine. It seems to me my mortgage institution would suddenly lose its ass on my loan since they bought that loan assuming a NPV at a 6.5% fixed rate. Who pays for that – the government? That would seem to be more staggering than the statistics we have now – by a multiple of around 10, right? I’d be interested in hearing your views on the holes that can be poked in your plan. And by the way – cheers to you for being so bold to pay for a full page ad in a nation-wide paper to express your thoughts – it’s time to give the bureaucrats a piece of our minds. Don’t they really work for us?
This is the first plan I've seen that makes sense to me. The most important aspect of it is that it attacks the pain points for all of the people affected by the recession, and not just those who are in bankruptcy and/or foreclosure. It’s also important to me that this plan doesn’t rely on the “trickle-down” theories which I believe will not work (at least not quickly) in this situation.
I'm one of the lucky people who have not lost their job in this whole debacle, but what I really want is to leave my job and start my own small business – something I've been planning for the last 2 or 3 years and would now be ready to enact if not for the current crisis. The lack of available credit (for business loans, etc...) and the fact that I now owe $50k more on my mortgage than my house is worth make it impossible to justify taking such a risk.
I do not want to give up and go the route of foreclosure or short-sale, but it's starting to make sense because if I don't do it now I'll never be able to get out of this situation without ruining my credit (at least until my home is worth close to what I paid for it in 2007). On the other hand, if I was able to refinance my home (per the plan described on this blog) so that I wasn't dumping money into a mortgage that I may not be able to benefit from in the next 5 to 10 years, I would feel much better about leaving a solid job for the independent world of small business.
You are right on target with your idea. After all, it was the greed and oversight of congress that let mortgage backed securities be sold over and over again in the stock market. However, I feel that the homeowners that have paid all their payments on time should be rewarded in some manner. Anonymous.
This idea would provide much needed relief to individuals as well as to the economy as a whole. I hope this gets serious consideration by Congress and the new Administration.
While the idea is revolutionary, and it will help, we need further steps to make a real impact. I believe the time for a flat income tax has come. Eliminate all of the deductions, including mortgage interest, and charge everyone above the poverty level a flat tax rate, thus further reducing deductions and refunds and perhaps the IRS payroll since things will be less complicated. It is equitable and proportionate to income.
Fabulous, well-thought-out, and realistic...for ALL parties involved! The other question that came to mind as I read this was, "What about the auto industry?", and then I saw the blog from the Emeritus Prof of Theoretical Physics and felt, "Why aren't our leaders thinking like these folks??" Why hasn't anyone in Washington thought about something like this, or why haven't they had the moxie to make it public? Regardless, this is good stuff - how can we make it reality??
Fantastic idea! Our government has to take some responsibility for being soooo irresponsible with our (yes its ours!) money over these last years. It is not the individual who has been irresponsible with their own money that has caused the collapse of our financial institutions. It is the irresponsible, overpaid CEO's who receive Millions in compensation (even when the company fails), and our government who allow it to happen, then take our tax dollars to bail them out. The only thing I can see happening with their Bailout plan is our taxes increasing to make up for what they are serving up to these companies (with little restriction mind you). Our government is the most irresponsible of them all, and we, the individuals, will be the ones who continue to pay the price for their irresponsibility.
This is exactly what we need to bail ourselves out.
The clarity of this plan is astounding. Where is Washington with all their resources and talent when it comes to a bottom up approach like this proposal? For all the reason's cited it is a perfect plan to help the average American immediately.
This is "right on the money". Since all this bailout talk started, one thing kept coming to mind. If the Fed is going to underwrite the buying of mortgages at a discount to get these banks off the hook, they should sell them to the homeowner for a discount. Your plan is easier to manage and would be quick to implement. I did the math on my property and it would be "life changing". KEEP PUSHING. Thanks.
Lee Payne
Virginia
Sounds to good, and theres nonthing for the fatcats to make off of it......will never happen in this greed laden country. but theres always prayer.
Great Idea Finally a common sense plan that helps everyone and can be implemented immediately. Get Warren Buffett and Jack Welsh as the co-promotors of this plan and it could be in place within a month.
Larry Kershaw
Cape Coral, Fl
Well Good Job! The problem is your idea is so simple and logical that our elected officals won't undersand what your proposing. There are no campaign contributions (favors) that need to be repaid in your proposal, no kick backs or incentives to our beloved law makers. You have my vote but I'm afraid law makers in Washington will scratch their heads and be clueless on what to do with your idea. Best of luck, John
Lithia, Florida
I'm 62 years of age, in 1963 an engineer from GM laboratory came to my high school and demo a small car with solar cells using a flashlight to drive the wheels...
-----------------------------------
We have been held hostage long enough by the BIG 3 Automakers...so ...now they are in
trouble... so why my question why have they not brought newer technology to us sooner... ? ?
-----------------------------------
I agree with all of Dennis Paulaha ideas & agree with all other bloggers... that it will work & it will work much quicker to help our economy....then the current BIG bail-out of the big Companies in the U.S.A. that has happened to date.... So write your congressman & tell them to support Dennis's ideas... thank you.. Anonymous
I like the idea with one caveat: A mechanism for having savings realized by landlords passed on to renters. The government program should benefit all, not just homeowners.
Rather than pay the banks up front for their mortgages with this plan and have them sustain losses due to reduction in value, I would suggest that the government guarantee the difference between the existing mortgage interest rate and the 1 1/2% interest rate you are proposing. That way the banks handle the mortgages and the government doesn't have to come up with the big bucks immediately. It would pay a little over the life of the mortgage. The mortgage holder would have the same effect, the homeowner would get the benefit and the government would hold on to its money. The effect on the economy would be the same. I have to give you credit for your initiative. Now all who have read this must get public attention from the media and the politicians. I hope you follow through.
Well said! We had to file bankruptcy to keep our home because of the loss of my wages. Even though my husband is still employed, we took a serious hit. Now we are living on court appointed amount, and with the economy the way it is, we are barely surviving. If our mortgage payment could be lowered, due to lower interest rate, we would once again be able to live like human beings! We are sick and tired of the bailouts (or consideration of a bailout) for the multi millionaires who mis managed their companies. ENOUGH already, take care of the very people who built this country and keep it moving, let the millionaires twist in the wind!
We have to get this out to the public and act quickly, otherwise it will not get any attenetion, people will forget about it after Dancing with the stars tonight! We need action, protests, etc.
My simplistic answer to the comments regarding lost revenues to the banks on existing, higher interest mortgages:
I assume that the only way this could work is for the government to buy out the existing mortgages and replace them with the government mortgages. The government gets repaid.
This is not free for taxpayers. Nothing is ever free. The government will be repaid, but they will not get back what it costs to buy out the existing mortgages.
Can 1 1/2% loans repaid to the government create a break-even for the amount originally paid to buy out the mortgages? Will the economic benefit create something better than break-even?
What sounded good initially requires more in-depth analysis.
I too want to say your plan is absolutely the right idea. It deals reasonably with the part of the economy that is at the root cause of our economic problems. Your plan will do a lot to stop falling home prices and generate demand for both new and existing homes. In addition it will put money (from the savings on interest payments) back into people's pockets so that they can choose to both save money and/or purchase goods and services. Your plan would be easy to implement and create quite a boost along the road to recovery from these hard and difficult times. I hope that our elected officials will take serious your very good idea. Thank you for taking the time to develop and write up this proposal... and to pay for publishing it for all of us to see. Your idea deserves serious consideration by our elected representatives.
This is a great idea, but there are some rough edges to be worked out. How do we get a plan like this implemented? How do we fight the financial lobbyists who will surely try to defeat this idea?
Frank A
Tucson, Az
This sounds like a plan that should be implemented. It actually directly helps the American people. Politicians are elected to lead- now they seem to just kowtow to big businesses- even floundering business with bad business design. Make a change- do something different- represent the people that elected you. Do you honestly think any American household would disagree with this plan? This is a straight forward plan and represents the wishes of the people.
A very good idea, provided it has support of those in Washington. It is often too much to expect that the 535 members of Congress will actually do anything to help their constituents in their daily lives, as opposed to the PACs and corporations that are out to secure greater profits at the expense of all others. What will be done with the comments left here? Is there any type of movement to get this idea in front of and considered by the Congress? If not, then it is a wast of time. Media outlets and consumer groups and grass root organizations should be contacted, recruited and attention focused upon those in Washington. It is time that the people, not the corporations, got a say in how their taxes are spent.
Send this to every member of Congress and tell them to get to work on it.. It beats giving the money to corporations who do not use it as was intended. i.e Bank of America in Ill.
Great idea! We need help. How can we make this idea move forward? This should be for everyone. Everyone is having a down turn in someway. What is the next step?
I have been working full time since 1968 and a Viet Nam era veteran. I have asked for very little from my local, state or national governments. I have paid my taxes every year and when I heard about the bailout I thought, here we go again, the large corporations getting our tax money when I could use the help. You see I have spent just about all of my retirement and my weekly paycheck on a adjustable rate mortgage. My biggest problem is that I have never missed a payment or even been late so guess what? I don't qualify for any relief other than an expensive refinance. Your plan makes too much sense to the pandering politicians because like the CEO's and CFO's they cannot line their pockets.
I think this is much better than giving the money to wall street, after all it's the taxpayers money, it doesn't belong to the Senate, or Congress.
I like many others did not buy more house than I could afford, so I don't agree with only helping those that did.
What a refreshing, logical sounding plan!!! We the people need to arise, speak up, direct our politicians in the desires of their people...not those of greed and power, but in finding a fair and equitable solution for all. This seems to be a great start. Where do we go from here? What's next?
Terry in Scottsdale
This approach will help to turn the 'difficult' situation that we face in this country around. It seems that now is the time that we deal with the problems that this country is chalenged with squarely!
Let's get started now!
Right, but what would be the impact on community banks who count on mortgages as a source of funds? I'm no banker or economist, but it seems like socializing this business would put them all out of business. If they falter we'll see a run on deposits like we've never seen. How can any of that be good? What am I missing here?
This is gonna feel a little harsh so take a breath:
Gimme, gimme, gimme! This is the mentality that got us into this mess. How 'bout we all man up (including those idiots in Congress, Wall Street and Detroit) and work our way out of the problem? Pain is an unavoidable part of the human experience. Who said this was supposed to be easy and simple? My guess is that we've got at least a decade of work to do.
I am a Republican, but can believe in this plan....let banks finance cars, businesses, but not home mortgages.
Great solution, finally a fresh approach to helping the American people, not the thieving corporations and government. Who do we need to get this plan in front of, how do we monitor it and who will be held accountable for it? This needs to be pushed hard, very hard because something needs to be done to save the American families from poverty and homelessness.
What's the next step? The ad has been placed, those most passionate about change have spoken. What now? Bail-outs won't work. A people first plan might have a chance - but how?
What's the next step? The ad has been placed, those most passionate about change have spoken. What now? Bail-outs won't work. A people first plan might have a chance - but how?
I am retired; my home is now worth less than what I paid for it and I have been recently diagnosed with cancer. I have paid my health insurance premiums for 40 years and find out it does not come close to paying for all my treatments. My mutual funds are worthless. My cash savings will be depleted within the year. Soon my only choice is to walk away from my mortgage. So does your suggestion of a one and half percent government backed mortgage appeal to me? It's the only life line I can see out there. Great idea!
Great concept. It makes entirely to much sense for the powers that be in Washington. What would happen to all of the mortgage companies that have acted resposibly and hold good, sound mortgages.
My gut feeling is that this is a great and simple idea and could very well work. However, the resistance from Mortgage Lenders will be intense and we will be faced with a fierce fight.
Franco
Apollo Beach
Florida
great idea , good luck selling it to our screwed up government
Please forward this GREAT idea to President-elect Obama and his economic team ASAP!
Fundamentally, I like the idea, as long at it's means tested and progressively applied. Otherwise, the wealthiest of Americans get yet another disproportionate break that they don't really need. Everyone knows that the working poor/middle class are struggling the most in this country and it's getting worse, not better.
Is the rather extreme idea that you are proposing to flatten and greatly reduce everyone's mortgage costs another example of "disaster capitalism," where huge changes are rushed through while the nation is in crisis, with little or no real discussion or fact-finding? I worry about this. Look how fast the Congress gave in on the financial system bailout and THEY created the mess!
Also, what about all those Americans (students and their parents) who are paying far too much for college education and interest payments on their loans, which in turn kills their ability to save, to buy a car, to buy a home, etc? At the same time, many graduates of college enter their first jobs at modest pay levels, shrinking job options, cut-backs on health care, etc., all of which make it even harder to pay off loans.
Interesting, Simple and clear sounding bell to all who are in trouble... but what is the true cost?
Remember, banks rely on mortgage interest or mortgage resale for income to pay interest on savings, CD's etc. and to create funds for more loans. What happens to them when you have government in the mortgage business?
Who pays for the person who defaults on their mortgage?
who qualifies candidates... Barney Franks? Chris Dodd? The same idiots who helped Fannie and Freddie cause this banking crisis?
I love the idea of low interest and lower payments, I would much enjoy dropping from $5600 per month to under $3K per month... i would even give up the mortgage deduction on my tax return for the privelige. But I do not want to take our country from the frying pan directly into the fire.
I think this ia a sound plan and will work...the federal government can make more revenue from this than the U.S. Postal Service, which they suck at...do away with that and turn it over to the free enterprise system to creat jobs for millions and get into the mortgage and oil drilling business...great plan!
Great idea,but it is to simple that's why the great minds in DC won't act on it. They would rather give banks low interest money and in turn the banks still will not turn loose of the cash,I here first hand from my wife who is in the banking business and tells me the bank she works for should just say we are not lending at this time instead of setting impossible standards to get a mortgage loan by people who are not in trouble, have paid there bills and are not risky loans.I guess its just to simple and makes to much sense.
I have been asking for the same mortgage idea as published by you in the USAToday for months now. Only I have been asking for a 3% 30 year fixed program. I’ve written my Congressman and the President but also realize that “Government by the people for the people” is only a dream today and one needs money to get their attention.
I only have one comment in that I want the program to include refinancing of current mortgages regardless of the LTV on the home. A prime example is when I tried to refinance my current home. We are great credit and have never had a late payment, in fact we over pay each month. But due to the drop in home values we could not qualify to refinance to the recent lower mortgage rates. Once again showing those of us who are good citizens and follow the rules come out on the losing end. AND that increase in disposable income would have gone towards a purchase of a new car. Now we’ll be holding off on such a purchase for at least another year. As such we will not be able to help push the economy forward.
This is a great idea, besides we, that taxpayers, own Fredie Mac and Fannie Mae so let's put them to work for us. And if the banks want to match the rate then all the better. If not, their loss. Besides, they don't seem to want to be in the lending business anymore anyway.
great idea. help the many americans that are losing their homes. i thought america was the land of the free.instead we are slaved to our debt with high interest rates and poor healthcare.this would definatley free up some of my money to purchase a much needed car and past due amounts on credit cards. that available extra money would help the auto industry and banks. hope your are heard by the right people that can make it happen. good luck to us all!
Interesting concept but, as a real estate broker and investor for 30 years, it is idiotic. The government would want to sell the mortgages to investors. Who would buy an investment at 1.5%? You never address the additional housing units that would be built, thus starting another "bubble". Not EVERYONE should OWN a home! Some people are too irresponsible even with a 1.5% mortgage.
If the rate was in the 3.5% - 4% range it might have some merit.
I am disappointed that so few have made comments on this.
Unless I'm missing something, and I don't think I am, this plan must be considered by our government as a solution to the mortgage problem.
We all must get this information to our elected officials and get it implemented right now!!
We, and America, can not wait for the new administration, and we can't allow our Congress to go home for the Holidays without taking action this plan. Get it done as a Christmas present to all.
I rejoiced when I saw this in the paper. I have doubted the whole concept of trickle down economics for a long time. If you give the rich and business owners tax breaks there is no requirement they will re-invest those savings, especially if the consumer base does not have the money to purchase their goods and services. We have clearly seen the rich get richer and this has to be part of the reason.
I have used the exact same term you use of trickle up economics as one that makes much more sense. If the people that make up the consumer base have more money in their pocket they will spend more of it which will lead to businesses expanding to supply that which will lead to greater employment which will lead to higher tax revenue.
This would be a great way of executing something like this and will get at the root of the problem. Giving auto companies and financial companies money to keep running does not fix the real problem of consumers not being able to afford cars, houses, and other goods. If the American people have more money to spend and save then everything else follows.
Tremendous!!!
WOW, Great Idea! It's like we have our very own GEORGE BAILEY (It's a Wonderful Life) Thanks Mr. Paulaha!
How can we help pay for the ad?
With so many brilliant ideas to help this failing economy, why didnt anyone come up with these solutions a year ago... why wait til the great USA is in the worst financial turmoil our generation has seen. Dont get me wrong, I will be the first to say, this is a great idea to the problem were facing, but the truth is we got ourselves into this mess and we are the ones that have to take responsiblity for our debt.
Letty
Corpus Christi, Texas
Great idea! trickle up works much better than the trickle down theory.
A great plan that will not be implemented. It offers nothing to the already rich - hence it will receive little serious consideration that it truly deserves.
Finally a plan that helps the people who are responsible. My wife and I very responisble with our finances and we don't carry any debt (other then the mortgage, on a house we CAN afford). But I know because of all the bailouts of greedy corporations and individuals over the years WE will be the ones who pay the price in the end. I look forward to when my house is paid for, To quote financial guru Dave Ramsey, "Live now like no one else, so later you can live like no one else!"
A solution that shows promise! A government support of the people that will result in cash flow to support the future of our economy. Loans given based on a stricter ratio of income to borrowing dollars would eliminate the "live beyond your means" buyer while supporting the majority of honest Americans striving to work for a living and support the outlook of the future. Kudo's to those doing the thinking. Let's light a fire under those that can make this happen.
great idea. Why give breaks to failing corporation when we could receive gov benefits direct...
Dr. Paulaha - this idea needs to have the attention of every newscaster and pundit as well as the politicos in Washington. It is too "common sense" to be ignored. Much better than the continuing bailouts which will go on forever - this will substantially help reduce those companies in trouble with the extra monies provided by your plan.
Great idea!!! It would help the people who are doing everything right and have to pony up for the people who don't. Congress made a mess with Freddi and Fanni. All the people in Congress who made a mess of those two- Frank and Dodd should be out and put someone who Knows something should be put in charge. For once Congress should do something that would do some good for the people not their party or their pockets!
There are more basic problems that affect the American Economy than the housing crisis. That crisis is a symptom of the problem. Integrity has run amuck. For instance, the Illinois Governor was arrested for "suspicion" of selling the vacated US Senate seat of Obama while Weatherman Terrorist leaders go free from murder charges based on technicalities (Ayers- "I wish we'd done more" & "what a great country- a person can get away with murder"). Specifically, who is going to determine what is a US Citizen (depends on the meaning of the word is...?)? The courts won't even examine the facts related to Obama's citizenship qualification to be President.
People must come to respect our laws and we must begin to obey and enforce the laws equitably. The US has become a third world country in relation to the laws and graft and corruption. Our leaders have been blinded from what is true while lawlessness reigns supreme.
There is only one problem with this concept; IT MAKES TOO MUCH SENSE!!! Where do I sign up?
I think it's a great idea! Thank you for sharing your talent and treasure.
great program.needs to get started right away
Investing; I think it's a start; maybe add credit cards (decrease the interest rates) and bank accounts (increase the interest rates); Not everyone has a mortgage; there also needs to be an expiration date (maybe 3 to 5 years) then go back to the original rates or let people refinance at that time; the mortgage, credit card and bank industries would loss some money but not as much as they are losing today…
That sounds PERFECT!
Brilliant in its simplicity, logical in its impact, so long as the lending guidelines include ability to pay (debt load) and willingness to pay (credit history) are not ignored
This is brilliant! How can we get this moving forward?
Outstanding idea - to bad it would never pass in Congress.
There are to many special interest groups who rather steal and take the Federal Gov't money (our money) illegally
I think your plan has merit - basically because trickle down isn't working. Trickle up would.
Problem is - we send our least gifted people to Congress - they will never be able to follow the bouncing ball if it doesn't have a political component for them.
Thanks for trying though.
Dennis - I think what you are proposing is fantastic! I am excited that someone has taken not only the time to put this suggestion to together in basic laymans terms but, also the money to post a full page ad in a major, nationally distributed newspaper! I am very concerned (not worried-God has my back!) about the future of the economy, my job, my ability to pay bills, etc. I am very responsible, work hard, pay ALL my bills on time, do my best not to waste money (even though I have been known to have a weak, retail therapy moment or two in my lifetime!)and that fact that I am faced with thinking about things the way I have been forced to in recent weeks and days is very sad. 18 years in school (BS and MS) and 15 years of working in Coprporate Amercia for this?! Thank you for putting this together. I am telling everyone I know to go to this site and support you! I hope it gets the attention it deserves - I'm about to contact my next favorite source of news - Good Morning America! God bless you, thank you and happy holidays!
sounds like it could work .I have a Daughter that lost her husband and may lose her house and a son that lost his job and is working for half what he made when he purchased his home .their ages are 47 and 51 getting late for them to start over.
Kenneth in Texas
This is too simple and makes too
much sense, this is the first "bail out" plan I have seen that would solve a host of issues with little outlay from the US goverment. The consensus of most of the US population, due to the lack of confidence in our law makers, is that this is too simple and not complicated enough to work. Sometimes the most simple plans work the best, I would be behind this plan 100% where do I go to help?
Brilliant idea ...and logical too. Our economy flows based on consumer spending and confidence. This is s timulus package that wilk work.
Genius idea...its so simple that its crazy enough to work...now, what do we need to do in order to Make This Happen. I'm small on talk and big on action. Just tell me what I can do! I'll be reading the paper to find out...
Sounds like a pretty good plan to me! We would love to cut our mortgage payment in half -- then we could afford to purchase a newer 4 wheel drive (which we need in the winter) that the entire family could fit in and my husband could get to work in. Did you send a copy to the President Elect? Since he says he's for the little guy and wants to make changes -- this sounds like a good place to start.
Wow. As an educated American, the government offering affordable mortgage loans sounds like a great idea. Talk about change. Imagine, everyone being able to afford to purchase a home without the labeling of government welfare. Interesting. This plan would encourage citizens to get fiscally viable for a loan knowing that they have a 1%home loan waiting for them just because they are legal citizens. To push this even further, it would be wise for the government to stabilize the cost of education or freeze it for a number of agreed upon years, lets say every 20 years. That way, a generation of college grads arent starting off 30-40K in the hole when they get out of school. After 20 years after school, instead of still paying for 20-year old college loans, these people could be spending that money to sustain the economy on increase their personal savings, start new businesses, etc..
It's about time that I've seen a plan that will benefit ALL Americans and not just the companies and individuals who have gotten into financial distress. Let's get this done!
Yes I agree! Now how do we make it happen.
This is so great even my putso can appreciate it. I doubt anyone who matters will listen though.
I am absolutely in agreement with the 1 1/2% mortgage proposal. Sooner better than later.
wow! Just imagine, everyone could own their own house. Almost no homelessness. For about 500-600 per month which is what mnany people now pay, they could have a 140,000.00 home!
Thats a palace for most people.
PLEASE LETS GET THIS GOING, EMAIL YOUR REPRESENTATIVE NOW!
Sounds like a good plan to me. Being a single mom and a homeowner right now is very tough. I cannot spend money on anything other than current bills. would love to see this implemented.
Its a great plan.
Its simple.
So it will work.
Everyone else may have 1000 ways to fix the economy. But this plan is clear, simple pure genius.
Washington is full of people with degrees but all that brain power have created a huge mess.
Keep it simple.
This plan will work.
Great Job! A lot of work still needs to be done, but with thinking like this America can come out of anything. Thank you.
I'm no financial guru, but, it seems that congress is giving away buckets of money to the financial institutions and they can't even account for whats being done with it. While, in my neck of the woods in south Georgia, I'm seeing more and more homes for sale and more emtpy homes which are foreclosed on. This is what happens with our political system of lobbyists and political contributions by corporations, which, when in trouble as many of them are now, they call in their markers and get favorable responses from OUR government. I completely agree with this idea of trickle up economics, isn't it our money in the first place? I feel these companies should be allowed to fail, and very shortly thereafter I guarantee another will pop up and take it's place with a better financial plan. Our government needs to stop rewarding the failing's of these companies and take care of the people who put them in power.
This is a great idea and one that makes sound economic sense. What a way to get the economy rolling again. We can not go on waiting to see what will happen, but rather, we must take a proactive approach. Housing and jobs are the two drivers of any economy (that is why third world nations remain that way- they have very little in the way of housing and jobs are scarce). I have yet to see any real solutions on jobs. And, certainly, the only discussion on housing and mortgages have been for those in trouble - but what about us who are "making ends meet" but are paying our mortgage? Why should we not benefit as well?
It is time to do something dramatic and this is a great, well thought out and rational plan for the USA.
President Elect? Balls in your court....
best thing I've seen !!!!!!
The government can loan money to the big 3 at 5% but I'm still paying 6.3% on my mortgage! And I actually make money that pays my bills on time. Why not give these mortgage investors the option of refinancing all of the mortgage paper they're holding to 4% or the government will take these loans from them. They can even charge me a nominal fee for the transaction. Doesn't this give everyone deserving of a break a chance to free up some money while making, instead of costing, the government revenue?
Great plan! This looks like the plan I saw a Fuppie.com
Finally, a voice of reason and support for the everyday man and woman who gets up each day and does their best to fulfill the needs of their employers, achieve their personal dreams for themselves and family, and is bled to death financially by government(s) [states are the worst!] as part of their redistributin ploy.
Enough of the party-hardy Wall Street types getting theirs before any of the rest [remember the over-the-weekend charade when our bureaucrats passed billions to them without even mouthing the words 'Now what's YOUR plan??'
Then the AIG fat-cats went on to bathe in money at their golf and spa fiesta THE WEEK AFTER the kids from Congress paid them from our pockets.
This isn't the America I knew, nor my families who gave so much, only to be where we are today.
I applaud this proposal, but doubt if it will be heard above the partying in Washington. After all, what fuels the lobby funds and side attack squads is cash that goes to them, not the everyday person.
Let's hope that the right thing might finally prevail.
I am not an economist but this plan appears to be sound. Better than the alternative, allowing all
the wheeler-dealers access to bailout money, which is supposed to be watch-doged but will most likely not be.
The only drawback I see in this plan,is, that it does not address the recessionary drive our country`s public and private debt imposes.Our GDP is driven by this debt instead of being driven by industrial manufacturing. This is like making your house out of paper instead of masonry.
Yours truly,
Robert McMahon
Lt.Col.,USAF,Ret.
What a wonderful solution to solve the mortgage crisis and put $ back into peoples budget. Brilliant! Let's PASS this into effect.
~Bill Covert
www.AcceleratorForSuccess.com
I guess the only concern I would have is if everyone was able to go out & buy a house, it would drive the price of houses up further by greedy builders.
Seems to me there are a few problems here:
1) Not every US citizen can afford a a 30-year mortgage at a 1½% fixed rate on a $500,000 loan.
2) So, do we require some kind of qualification process?
3) If we do require some kind of qualification process, does it involve assessment of income, debt & credit ratings?
4) If it does, Where does that leave the unemployed, the deeply in debt by reason of job loss, medical problems, natural disasters, etc. who really need and deserve some help.
5) If not, how do we avoid making loans to the irresponsible, negligent, stupid and greedy who won’t make their payments no matter the rate?
6) Who can trust to make these decisions? Qualifying folks for loans they couldn’t pay is a big part of what got the housing market where it is.
7) With property values tanking and the market flooded with homes for sale, if we add 1 ½% int. rates and little or no qualifying what stops the speculators hoping to buy low, pay little and sell high when the market recovers? That would be the other part of what got the housing market where it is.
I agree with this idea, as a realtor I have saw in the last couple of weeks what impact reducing interest rates can have on housing values, Example while negotiating a contract, interest rates fell allowing the buyer to pay 5% more for the home in return satisfying the seller. I know my example is on a very small scale but in reality it increased housing values. We all know that every solution will have stumbling blocks but I feel this idea would make a great foundation to rebuild from.
I was in the Mtg business for nearly a decade and this by far the best way to handle the ongoing financial crisis. Treats the underlying root cause while offering assitance to a largest segment of taxpayers. - P-Dave
This is right on the money! I'm sending it to our elected officials!!
I Support this concept, Our Stuffed Shirts Congress hasn't had a clue about good economics and National Security since Eisenhower.
Just look at who the big investors present Bailout's taking care of: Saudi Arabia ( who brought us AL-Qaeda): Dubai (who tried to buy our homeland security port security and Owns American Banks).Communist China and all their Human Rights Violations, etc, etc.
Free Trade/New World Internationalist have had Congress in their pockets for a long time. They got Tariffs abolish and made into a bad word. Tariffs that had protected America from Foreign Government "Owned" or subsidized manufacturing like Communist China, Japan etc. Foreign Governments have been taking over The United States from within for a while now by dumping their subsidized Manufacturing Products Duty Free in the United States and financing our Debt Based PONZY Economic Model until it collapsed
Present GH BUSH'S/Clinton's "NEW WORLD ORDER/Free Trade, loan shark based , smoking mirrors Economic Model..
and Reagan's Trickle Down World Information Management Nation pipe dream were as bad as GW's WMD information.
Anonymous said...
This is the best and smartest economic plan so far designated to solve many of our fears.It's one that sounds too good to be real.We all know that "common cents" is not what our political leaders and the rich have a degree in.
Perfect, except for one minor flaw! You forgot to include any $$$'s for the personal coffers of Congressmen and Senators. Unless there is some way that the scumbag career politicians from either side of the aisle can get wealthy from this plan, it will never see the light of day on the Capitol!
We need to throw the whole lot of them out of there ... with very few exceptions ... and start over! Maybe Darryl Issa, Richard Shelby, and a few others can stay. But Kennedy, Feinstein, Dodd, Barney Frank, and that crook Ted Stevens all need to hit the bricks! Until our representation changes, we are doomed to follow the path we are on.
Bill in Ohio says -
This bailout idea is the only one I've seen that actually could benefit me and my family - we're now negotiating with a realtor in our town with an eye on liquidating our business because of expenses (read: a baloon mortgage that we signed up for because there was a pile of money that came our way - which we put into the business). Good decision? Maybe not, but we're in serious trouble...This would enable us to stay in business and remain productive and taxpayers. I pay $22,800 a year in taxes - $76/day that we're open, but that'll be over real soon if I can't get some relief!
I would favor this plan even though I inherently mistrust the government's ability to administer anything. If this plan were combined with The Fair Tax, saving American business and regular folks millions of hours and even more in costs, we'd REALLY have something!
I believe that this would be a win-win situation. As with anything else, this will all take time to fix. I believe there will be abuse of this by investors--but I would limit it to a one time deal possibly. Some of us forgo extras like healthcare, going out to dinner, new clothes, new cars, trips, new toys, electonics etc etc to pay our mortgage and bills first. We are all affected by the poor economy. I wish that we could rally people to do something--protest in mass, so that the 'people' we hire to represent us know we are serious about making changes that benefit everyone, not just one sector. I am wondering who is going to bail out those of us paying the taxes when we can't make it anymore...We can debate all day long about what the solutions are--but sometimes you need to make a statement and act on it--this is the first step. Thank you taking action and maybe inspiring some of us to DO something to show we give a damn about what is done to us.....
Great plan! How can we, as citizens be sure that every member of Congress gets a copy of this article, make sure that they read it, and have a response. I am having a economic collapse, will the US Congress come to my aide and grant me "loans" to keep me afloat?? I drive an American built auto (Chevrolet), have an Mortgage with GMAC, an American Mortgage company, and have a Citi Bank credit card! How about a government loan (bailout) for me!
THIS PLAN WOULD WORK!!!!!
Come on Washington...react!
Love it. Perfect Plan. While we are at it, can we get the credit card companies to lower their rates as well.
Fantastic idea! I would love to buy a home and this would make it feasible.
This is a great idea, and I think all efforts should be made to bring this into the national conscience and force the congress to hear it. We can not continue to have our heads buried in the sand when we have such sound idea like this one being offered by this great mind.
Great idea. Works for me if "financially qualified" can be reasonably defined and compliance with that standard monitored.
This is a great idea! It will help retirees tremendously who have had their investments wiped out by the market crash. It will vastly stimulate the economy by giving all classes of people a lot more money to spend, more jobs, etc thereby bailing the states out of trouble who aren't collecting enough taxes and facing huge unemployment comp payouts. A truly brilliant idea!
Why does the government insist on giving money to the very people who stole it in the first place? Why does the government insist on giving money to corporations that lost the money in the first place. Why does our government continue to support businesses with failed business models?
It is time for a change. This is a great idea and as such I have no doubt our congress and other leaders will ignore it!
I like this! Two questions.
One, are any politicians supporting this?
Two, would this work for car loans for the big 3?
Thanks
Details people! 75 Million homeowners in the US x $500k per home. Where is the governement going to get 37.5 trillion dollars?! They have trouble passing a bill with $700 billion bailout...
http://www.census.gov/hhes/www/housing/hvs/qtr208/q208tab4.html
Dennis Paulaha is thinking "outside the box". My thanks to him for both the idea, and for taking out the expensive ad.
EVERYONE PLEASE SEND A COPY TO YOUR CONGRESSMEN AND SENATORS
hmmm.. No thanks. Dr. Economics .. the market will take care of itself. The Govt is not your mortgage broker. The Govt does not have any money - its my money and I don't want it to be given to either corporations or individuals who made stupid mistakes. How long will you keep the bubble inflated with artificial incentives? How long will the Govt keep doing this? No thanks.
I love this idea. Those of us on Main Street who've been renting all our lives would be "bailed out". We'd finally be able to afford a home.
I love this idea - how thoughtful and creative.
Good idea...but who executes? Perhaps the banks could be paid a fee per transaction to process the millions of pieces of paper? Or each person could enter the information into a data base and have on line approval. Why limit it to $500,000.00? All mortgages should qualify since it is not a hand out but rather a loan that will be colateralized and paid back. However, what about the people who are currently upside down in the value to mortgage? Maybe a different program for them since the risk to the people is greater?
Just some thoughts...I think you ae on the right track. Good luck kn getting someone in Washington to listen.
Horrible idea. Why make the government/us the guarantor of the mortgages? Why not force the banks to lend us the money for 11/2%? They're the ones that got us into this mess. Also, who is going to pay for the refi charges? It also better be the banks! Who are you anyway? A little more transparency here would be a good idea before you get people all worked up.
Wiggy, Fort Wayne, IN.
Great opportunity for the politicians to learn from who pays the bills. Let's move on this! Who determines where this goes next? I'm willing to send it to my congressman. It's time we the people took control from those whom we elected. They don';t get it! BailOuts Don't Work!
I fully agree. Our government sould adopt this format and the economy would turn around. Stop to think how many workers are attached to the housing industry.
What a great idea!! Makes perfect sense!
What a great idea!! Makes perfect sense!
I'd been on the phone with my mortgage company trying to get just my HELOC down to 0%. They say they can't do it, because they'll shut down if they do (overhead, etc), which I don't believe. But your plan is even better. Let's make this a reality and part of a new future for all of us responsible people.
This is the most realistc solution for United States, the goverment has to make this plan as a law where all the banks have to folow it inmediately.
I have seen lenders modifyn loans for estrugglinng homeowner and given them a variable interes rates as a solution, that can not be possible but is true. Also banks as Indymac Bank that is federal bank givin forberances agreement for 6 months increasing the insecurity in homeowner and thinking what will happen after the 6 months instead of givin a permanent solution of 40 yr fixed inmediately as you mention in this plan, the lender are doing where ever is best for them but for the homeowners.
EXCELLENT PROPOSAL I LIKE THE LIFE TIME CAP OF $500,000. ANY ONE THAT WANTED TO EXCEED THIS CEILING WOULD PAY THE PREVAILING RATE OVER THIS AMOUNT THAT I AM SURE THE BANKS AND MORTGAGE COMMPANIES WOULD RUSH TO PROVIDE.
TRICKLE UP IS THE ONLY WAY TO GET THE COUNTRY OUT OF THIS. I INTEND TO WRITE MY SENATOR AND REP. IN CONGRESS.
I am really disappointed in "our leaders" in DC. I would challenge anyone who can prove a honest sect of our federal government. I thought it was about America the Great, not their own greedy agenda's. I am a proud American that really wishes our government truly honored the position they serve with integrity and creativity. This is an extremely creative plan, and while it may need some fine tuning it is by far a better plan than the $820 billion bailout!
Median housing value in the USA is about $140,000 x 75,000,000 = 10.5 trillion but not all owe $140k on their house. Many of those homes are paid off.
TAKE IT TO THE HILL!
Do you honestly think that having the Government own everyone's home is the solution to our problem?
Sure, it sounds good on paper, and it sure feels good to think that it's something "For the People" ...
But what happens in 5, 7, or 12 years when some future president or congress decides to call in all those notes at once? The government would be in complete control and have super-dictatorial power over everyone.
It's bad enough that they we're about to have a government run automotive industry (yes, they're going to appoint a "Car CZar" who will have complete oversight and veto power over the auto industry), I don't want them anywhere near the keys to my house, thank you very much.
I prefer to keep my liberty and freedom, even if it costs me an extra $500 a month in interest.
Brilliant – I saw your full page ad in USA Today – spot on!
What astounds me is the root cause of our current ills has not been addressed – mortgages/housing market. Until that is done, the decline will continue. I was thinking a mortgage re-set for only some, but that approach is messy and would start a fairness fight. Your idea would solve it for everyone and be fair.
Now – the only way we, the public, will get any traction on your idea is to get this info before our elected Congressional representatives in both houses. We need to barrage them with your idea and tell them we want action – and we want it now.
Thanks for cogent thinking at a time when Washington DC continues to flounder. The future of our country is hanging in the balance.
MBA in CA
PASS THE WORD!
Washington will listen if enough people blog about this.
Obama used the internet to get elected, we can use it to spread the word about this wonderful idea.
Add your comment then forward the site to anyone you think would be willing to pass it on. The more people chat about it, the more likely it will be that Washington takes note.
Why don't we see options like this coming out of Washington. All we see are failed bailouts and proposed bailouts being given by wealthy politicians to the wealthy CEOs. This option directly helps the voter, the citizen instead of poorly run, failed businesses. I have often thought why not give each taxpayer $500K to pay bills and stimulate the economy. Its a lot cheaper than the hundreds of billions of dollars being doled out that hasn't even started to help solve the problem two months after this all came to a head.
Thank you Mr Paulaha for your educated and conscientious solution. Make sure you get this sent to Obamas' economic people. Maybe someone with a clue will notice how good an idea this is.
This is the greatest idea since sliced bread. Lets get the idoits in Washington on board.
I MYSELF AM A HOMEOWNER TRYING TO SELL MY HOUSE IN A DREADFUL SITUATION. YOUR PROPOSAL SOUNDS STELLAR- IS ANYONE LISTENING OR ARE THERE EARS PLUGGED.WE NEED HELP - THOSE IN DEFAULT, STAGES OF FORECLOSURE AND ALL OF US TRYING TO PROSPER AND MAKE OUR LIVES BETTER W/ A NEW HOUSE. I AM 44 YEARS OLD AND HAVE BEEN WORKING ON MY CREDIT SINCE AGE 16 - I AM A SERIOUS MINORITY IN THIS COUNTRY W/ STELLAR CREDIT. MY HOME IS NOW ON THE MARKET 80 DAYS IN AN AREA THAT IS SAFE AND BOOMING- WHAT DOES WASHINGTON DO BUT IGNORE WHAT THEY SHOULD DO AND WORRY ABOUT OTHERS? AND THE MONEY THEY HAVE - ALL OF THOOSE HOUSE AND SENATE PEOPLE AND NOT TOO MENTION THOSE FILTHY LOBBYISTS- WHAT EVER HAPPENED TO DOING AN HONEST DAYS WORK AND FEEL GOOD ABOUT WHAT YOU DID AS WELL AS YOURSELF? WE AS AMERICANS NEED TO STAND UP AND LET ALL OF OUR VOICES BE HEARD AND TELL ALL OF THEM OUR NEEDS AND CONCERNS. WE NEED TO UNITE AND GET SOME ACTION DONE ABOUT THIS HOUSING AND FORECLOSURE MARKET- TELL AS MANY PEOPLE ABOUT THE WEBSITE AND BLOG- I FEEL WITH ALL THE TAXES I PAY AND HAVING STELLAR CREDIT THAT IT SHOULD COUNT FOR SOMETHING- I AM GLAD I READ AND SAW THIS AD- GIVE ALL OF THEM ALL HELL.
I think it's a great idea... one that I've had for weeks. But I'd make the limit 1M, not 500k.
Great plan. my friends and I have discussed this several times. Being 57 and paying taxes since 17 and struggling now, we need this. The problem is, it's to simple for the goverment to understand. Keep pressing this. We need them to listen.
Yes. Yes. Yes!!
This would solve my housing problem which is forcing me to downsize to a cheaper apartment, and allow me to still pay back the $$ I owe to the credit card company.
Brilliant no less, unfortunatly the devil is in the details and to have the politicians in Washington to look at it for the simple, straight forward plan that it is and to entertain will be a challenge.
The very best of luck, you have my vote.
David
It seems like a very sound idea. In fact, if this was implemented then I could actually AFFORD to have a house, and would finally realize the American dream, myself, at age 60. Even though I have stellar credit, near 800, I can't afford a mortgage in the state where I've lived all my life. This would make it possible.
Interesting!
I am curious though.
Wouldn't it be inflationary?
And wouldn't it create a new real estate bubble?
I hope you can get a gutsy legislator to introduce it as a bill in Congress.
Donald Stewart
Tampa, Florida
This is simple and it would fix most of our slumps. Talk about something to look forward to! I could actually start my 401K & kid's 529 plan contributions again.
As long as we have a mortgage problem we'll continue with this present economic crisis. Problem mortgages continue to undermine real estate values which cause banks and lenders ongoing problems. KUDO's to Mr. Paulaha!!!
People, especially the politicians in Washington have to grab hold of this and not OVERTHINK it. It's simple. Each would be a secured loan. So, get with it Washington. Act on this. And, yes, the keyword is .... ACT. Act now.
Excellent idea, let's get the ball rolling. Come up with the next step to get this program going. You are right when you state that the big corporations are getting bailed out and the working class get zero. It is a great idea. Let's not take no for an answer !! Get rid of the rich, fat cats that run this country.( everyone knows what nationality i'm talking about)
Dennis, wonderful plan to
SAVE OUR ECONOMY ! one problem, you did not provide a way for the"big boys" to DIP into the food locker.Your plan has way more merit than anything yet discussed at the White House.
I would suggest writing to the National Assoc. of Realtors. They have a huge lobby in Washington and should be behind this type of remedy as it will clear all standing inventory, stop the foreclosures which are now over 1.2 million homes and best of all will illiminate the need to bailout these loser companies which are receiving cash (to buy stakes in Chineese banks) i.e. Bof A. I'm sure the Nat. Home Builders would support your plan also.
Eric Waite
Ca. RE Broker
As long as we retain the concept of a loan to be repaid and not a gift, I'm all for this. Unfortunately the apes who have the authority to turn this into action will listen to their special interest constituency and do nothing as usual.
This is one of the best plans for our economy and for the American people, that I have seen yet. Way to go!! M. Sweeney
Congratulations for speaking great commom sense in your article in USA TODAY! I am 100% in agreement; next to the Birk Economic Recovery Plan.
This is a plan that genders and applies justice, fairness, equality, and offers a level playing field to all citizens. This plan needs to be available to everyone not just a few. It needs to be applied like the Grace of God, "whoever wants to come let them come and receive the benefits of God's Grace" ; No Exceptions!
It offers a level playing field and it would be the first time in history that a plan such as this has been set up to apply to everyone equally; not in greed, power, or control. "He that is greedy of gain troubles his own household."
The American consumer must voice their vote, power, and appeal; because without mass consumer injection we will not get out of this mess anytime soon! Take away the consumers and you have no need for government!
Who do you Trust more: the American People to be responsible with the money, or Wall Street, Bankers, and Money Brokers? You heard what they said on Wall Street. Who Me? We don't know what happened to your money. Thanks for letting us lose it; I mean use it; it was fun and we blasted while it lasted. We never intended to pay you back because you know how it is when you speculate in the stock market. Sometimes you win and sometimes you lose. We would apologize; if we knew who did it, but sorry about your luck!
These people are getting the bailouts, no accountability, or responsibility.
Your plan is great and thanks for the courage to present it to the American People. I know it is complicated! However, count me in!
How do we make it happen?
I like the idea and would like the same kind of idea applied to the auto industry problem. Instead of giving (loaning) money to the auto makers give (loan) it to U.S. citizen auto buyers. Cash or tax breaks that would encourage the sale of U.S. autos which trickles up not down. Automakers who supply quality products will be rewarded as will their dealers.
Please.....tell us how to make this happen.....
Awesome idea!! I am sure both the Congress and the Senate will love it. Hmmm no big company lobbyist's to take them to lunch or a ball game? I guess not.
I wonder if the Obama man will jump in and drive this one to the next election. Possible.
Peter Bouley
Hudson FL
So far, this is the only proposal to save the main street. Please email this to your senators and Reps a.s.a.p. Also, forward the link to your friends and relatives. Let the tsunami begin! I already have forwarded this to more than 200 email addresses. We need to do our part. Let the voice be heard.
I support this. Tell me what we need to do.
Finally, someone who makes sense!
This will have a significant and immediate impact on the US economy.
Unfortunately, it makes too much sense! How can we move this along?
I concur. Excellent idea, with additional supports: 1. Eliminate mortgage interest deduction. 2. Failures are not allowed tax return revenue return
3. who administers? Are current mortgages restructured and remain with the current bank? 4 Does the government transfer existing loans of citizens who are not in default? 5. How are the financial institutions who own good loans compensated for the revenue loss?
6. Who or what group has the resources to lobby Washington and get this concept to committee?
7 Do you really think Obama would go for this? I don't....I am scared as **** for the next four years.
I love it. I read the add in the USA Today and had to see what others were saying.
Congresspersons Pelosi, Reid, Frank - are you listening??
President-Elect Obama - finally a plan that solves the core problem and is fair.
Secretary Paulson & Bernanke - why didn't you think of this?! You have not solved the core problem, only given money to those that were foolish in promoting mortgage derivatives.
All of Congress - shame on you for not regulating Freddie & Fannie - both parties, $$ from lobbyists!
I agree 100% The goverment keeps bailing out the Banks and now auto makers. What about the people who buy thier products or use thier services. It is not going to stimulate the economy if we the people do not have the buying power to stimulate the economy.
Your plan would not cost the goverment a dime, the banks would not lose real money because the mortgages they hold are just paper not actual $$$ & millions of americans would have their purse straps loosened to be able to make purchases to stimulate the economy.
I hope someone in goverment will act on this (Maybe president Obama).
Please let me know what I can do.
Rick
genius! I'm all for it!
what a great idea. the taxpayers get stuck with the tab of bailing out people and company's who actions should be illegal. putting money back in the hands of the consumers is what has driven this country from day one, not the top 1%.
It is the perfect plan!
Thank you.
What a sensible idea! There are just over 300 million Americans. If the government gave each and every person 1 million dollars, it would be a fraction of the billions spent on bailouts already. With money in our pockets, the mortgage mess goes away, the spending freeze is eliminated. We pump dollars into the businesses that need them. We pay sales taxes on all the purchases we make and infuse money into the government entities. Your idea is so great! No to "trickle down"...yes to "trickle up" economics! How do we get this obviously sound advice to the people who make these decisions? Come on America!!! Let's make this happen!
The common man...does the common man creat a job, risk everything to start a business, work countless hours to run the business? No he just works for a paycheck to support himself and or his family..oh and to overbuy so that he goes into debt and then can't afford the BASICS of life. This country is a bunch of whiners. We got ourselves here and now want to blame the businesses that give us all jobs and most of us benefits to boot. You are all pathetic. The government is the problem not the solution.
From your mouth to God's ears! As it is now, the American Dream is long gone. I'm tired of hearing about the "bailouts" being considered. Everyone has their hand out. I submitted a "forbearance and repayment plan" request to my mortgage lender in July. They've been putting me off, apparently waiting for what Congress was going to offer. The basis of my application was a devastating loss of income as my wife was out of work due to illness. Because she worked for a small office (less than 20 workers), none of the usual employee protection laws applied and her employer replaced her and refused to rehire her. Now, she's making 50% less than she did before and we can barely make our monthly payments. We've exhausted our savings trying to keep up. Every month, the bank says "We're working on your application," but at the same time, they say, "Will you be making a payment today?" So far, we've been treading water. Well, our well is now dry. Now the bank says that we don't qualify for any relief because we're not "behind 3 months" on our mortgage. I don't want a handout, just a repayment plan. The bank says they'll do that, but it'll still ding our credit. So we're out of luck either way. Our only option is to not pay. Then we're totally wasted on our credit rating for years! That's why my wife and I voted for Obama. Change and hope are good, because the sludge that has been shoveled from Washington and Wall Street for the past 8 years has done nothing. Were we better off 8 years ago? Heck, yeah! Let's roll on THIS one, folks!
SOunds good. BUt what about those of us who already lost thousands because our house devalued and we had to short sale because due to health concerns could not afford it as originally planned and could'nt sell it for what the mortage was? Now our credit is loooked at badly and I don't think we would be part of the "financially quailified". Even though we were home owners for 18 years and moved up and owned that for 10 years+. Everyone always forgets that the people who rent are part of this economy. Would'nt a voucher for 1% credit to pay off/transfer current debit prior to more debt and/or apply toward property purchase or car purchase for that matter be more inclusiveof all Americans. As far as the Auto COmpanies problems that others have brought to this forum, If the US automakers have a product with quality & price desired they will sell. YOu can't shove a product down the American People's throats. They need to make the better product & better price.
I think this is a GREAT idea! How can we get behind this and push our Congressmen to get on this NOW!!
I saw the ad while reading dinner on Tuesday evening. I had Fox News on all day in my room (working out of a hotel room) and did not hear mention of the ad once. If anyone would have picked up on the ad, I figured Fox would have.
Was there any news coverage at all?
Terrific Idea! It solves many problems and alleviates a lot of others. It's a bailout for the American Taxpayer who doesn't make millions/year and yet has to bail out those who ran their companies and business into the ditch!
It would allow some recovery of 401K dollars at very little interest; instead of watching it slowly go away in today's casino atmosphere stock market.
It makes too much sense, which is why those in Washington will probably not give it the consideration it deserves.
EXCELLENT IDEA! Pass this link to others--what else can we do to spread this idea?
The plan is a very good idea! The goverment keeps trying to fix the problem from the top. Thats no working anyone who knows economics know you need a solid foundation. By allowing the public access to low 1 1/2 pct mortgages the foundations will be strenghtend. For example I bought my home and have a mortgage I did not over borrow I'm not in debt in anyway but have a mortgage at 5 1/2 pct. If I was able to re fi at 1 1/2 pct I would be able to pay my home off much quicker and then go looking for a second home! I would have more money to by more goods and services. All of this money travels up the ladder to the rich which is fine with me but make the economy a solid one. Now the question is will Congress open there eyes before its to late.
Dave Essington Pa
What a great idea. I encourage the Washington pokiticians to consider this. What about those homeowners that are upside down in their mortgages?
Carolyn Evans
Realtor, Debary, Fl
carolyn15@hotmail.com
The government got us into this mess. It cannot get us out. The Democrats in charge of Fanny and Freddie are out for their own self interests. How about the gov't give us all 25,000 to get ourselves out of our own debt. It is our money anyway not theirs. Odf course the money really belongs to the people that pay MOST of the taxes..the evil rich people. But, that asside lets steal their money and give all tax payer aged Americans 25,000 and se what happens. Hahaha!! The gov't will never do that because it takes power out of their hands and gives it to the people - it is what they fear most.
Excellent plan... so many brains and so little time...makes sense...i have been reading U.S.A. Today for a long time and have not seen an ad like this... it speaks for itself.. and what a leap of faith... and genuine empathy for those who have worked hard.. have fought a good fight..and want the all American dream of owning a home... a client of mine also gave an example back after World War 2. He lost his job and could not keep up with the mortgage payments..he went to the bank and they let him pay interest only payments.. one year later.. he got a new job..and eventually paid his mortgage complete...what a theory. why and how has this great U.S.A. reached such a point that it is compared next to the Great Depression... to the author of this ad...well said...
Great idea. I hope the Washington politicians listen. What about those home owners that are upside down in their mortgages?
This is a great plans to jump start the economey with some real money!
The question I have is how does the government come up with around how much money to buy the outstanding mortgages, which if I understand iot correctly is somewhere in teh vicinity of 10+ Trillion Dollars.
The idea is brilliant only if the means to do it is possible.
Keep me posted ... in's in details ... the details
BOB I
The question I have is how does the government come up with the money to buy the outstanding mortgages, which if I understand correctly is somewhere in the vicinity of 10+ Trillion Dollars?
The idea is brilliant only if the means to do it is possible.
Keep me posted ... it's in details ... the details
EXCELLANT IDEA!!
This plan would give the consumer a renewed confidence.
A confident consumer will fix this mess..
It's a great ideal--but right now that's all it is. What can we do to make it a reality?
Post a Comment