Here's a simple idea to help "kickstart" our floundering economy.
Instead of bailing out financial institutions and others....Create an agency to provide 1% (Fixed Rate) home loans to any individual who presently owns a primary residence within the United States. These could be direct loans or guarantees to financial institutions with the foresight to do it. This would encompass the entire middle class of this country.
Think about it. This would cut the single most expensive monthly item on everyone’s budget, their mortgage payment, in half or greater. Almost certainly the money would be plowed back into the economy in many forms. Possibly even a few new cars might be purchased along with all kinds of other durable items.
1% Loans would make housing available for many new homeowners and those facing foreclosure. Particularly those already left out due to circumstances beyond their control.
Make the loans available with a reasonable horizon. Let's say for the next five years.
Fixed Rate Loans with a thirty year term would seem to make sense.
To qualify you must reside within the home for the next 5 or maybe 10 years.
Yes, this would certainly hurt the banking and financial industries. They might have to find other methods to find their way to profitability. Perhaps going back to servicing the customer’s best interest might be something to consider. And yes there will probably be a few less architectural wonders built in places so few of us visit anyway. Let’s not even start with executive compensation.
In short, bail out the taxpayer with his own money. We are going to be forced to pay for the mess anyway. Why not put it into our own pockets and see what happens.
ONE FOR ALL
Kev the Welder