January 20, 2009
A Real Solution
I have written down a few points here, for a program aimed at helping to alleviate the financial Armageddon we are in. The current steps the treasury has taken have not focused on the problem, the underwater consumers. Throwing money directly at banks has not and will not relieve consumers, nor create new lending. The following points will recapitalize the financial institutions while giving much needed relief to consumers.
· The government creates a loan program for indebted consumers to elect into, allowing a 0% interest rate.
· The program is for current debt, dated as of X. Any debt created after X will not be eligible.
· The consumer must qualify by meeting a certain ratio of debt to income under the 0% rate.
· If the consumers opt into the program, it will be noted on their credit report and freeze any attempts at opening new lines of credit unless approved by the government agency, thus disallowing more leverage to be created by those opting in, until certain levels of principle are paid down.
· Allow those opting in to consolidate mortgage and credit card debt into a single monthly payment of principle.
Some of the immediate benefits of this program would be that it will:
· Recapitalize the financial institutions from the consumer level as it pays off the outstanding notes.
· Shore up real estate values by halting the high foreclosure rates.
· Create extra savings that will be spent in the economy, saved/invested shoring up equity values, or used to repay the program debt off early.
Desperate times call for desperate measures. With a little innovation, we can avert a catastrophe.
Sincerely hoping for a real solution,
A Real Solution
I have written down a few points here, for a program aimed at helping to alleviate the financial Armageddon we are in. The current steps the treasury has taken have not focused on the problem, the underwater consumers. Throwing money directly at banks has not and will not relieve consumers, nor create new lending. The following points will recapitalize the financial institutions while giving much needed relief to consumers.
· The government creates a loan program for indebted consumers to elect into, allowing a 0% interest rate.
· The program is for current debt, dated as of X. Any debt created after X will not be eligible.
· The consumer must qualify by meeting a certain ratio of debt to income under the 0% rate.
· If the consumers opt into the program, it will be noted on their credit report and freeze any attempts at opening new lines of credit unless approved by the government agency, thus disallowing more leverage to be created by those opting in, until certain levels of principle are paid down.
· Allow those opting in to consolidate mortgage and credit card debt into a single monthly payment of principle.
Some of the immediate benefits of this program would be that it will:
· Recapitalize the financial institutions from the consumer level as it pays off the outstanding notes.
· Shore up real estate values by halting the high foreclosure rates.
· Create extra savings that will be spent in the economy, saved/invested shoring up equity values, or used to repay the program debt off early.
Desperate times call for desperate measures. With a little innovation, we can avert a catastrophe.
Sincerely hoping for a real solution,
