Someone asked why not give the US Citizens the bail out. I personally think it is possible to do so. However,not with just a hand out of $1million dollars. We are seeing the down side to giving Hand outs and the abuse it causes by what's happening on Wall Street. And now this ridiculas GM/FORD private jet fiasco.
The way this could work would be by giving credits not a lump cash sum. And it would be for US Citizens over the age of 18 not living overseas unless they are in the armed forces or working for a government agency and they must not be in Jail or have a Prior Felony history. At the start of the credit system, there would be a 2 year moratorium on price increases for anything purchased in the USA. This will create a two fold which I'll get into later. The first draw the Citizen shall take wil be for housing. If they have an existing Mortgage, the moratorium shall state they must pay off their mortgage and stay in the home for at least 2 yrs or if they HAVE to move, they can only purchase a home of equal value. If the Citizen just lost their home to foreclosure, then they can take their credit and purchase a home at the same value as their home they lost to foreclosure. (if the home hasn't been sold by the bank, they must buy back their home from the bank) If they do not own a home and are renting, they can purchase a home equal to the value that their income level would have allowed + $100,000.00. Or what a Mortgae payment would have been equal to their rent amount + $500.00. (which ever is the lesser of the two) This will stop everyone from going out and buying homes way over what they normally would have been able to afford without the hand out. And the 2 yr moratorium on moving stands for everyone to insure that price gougeing will not take place. The 2nd draw is to pay off bad debt. Bad debt would be any medical bills, judgements, liens,repossessions, credit card debt. Then the 3rd draw would be to pay off their car. If their car is already paid off, or over 10 yrs old, they can purchase a new car of equal or comparative value at todays standards. In otherwords, If you own a Honda Accord, you can't go out and buy a Brand New Cadillac Escalade. I think you can see where I'm going with this. The credit you take out isn't to overextend, rather get you out of debt and stay in the lifestyle you are in and can afford without being strapped by mortgage, rent, car payments and bad debt. After all these credits are obtained, your employment can be evaluated. If you have lost your job, you can take a credit to go to school to reeducate yourself. If you are currently employed, the 2 yr moratorium stands. You stay employed so as not to disrupt the balance of everyone all of a sudden wanting to be Stock Brokers or MD's and no one wants to work at a retail store as a cashier. And hopefully after these 2 yrs, the economy will be back to an even keel that more jobs will be available so those out of work, or in school can obtain a decent job with decent pay. The 4th draw will be to create a retirement account. One that cannot be touched until the age of 65. The 5th draw will be to create a college fund for your child/children that cannot be used for anything but college.
The 6th draw will be to purchase health insurance. The credit will be extended for 2 yrs - giving you enough time to incorporate the payment into your budget, or hopefully have employer coverage by the 2 yr date. If you already have health insurance, you are exempt from this credit.
Once everyone has a home, a car, bad debt paid off, health insurance, retirement funds, and college funds. Their credit is cut off. It's up to them to figure out how to keep from getting into overextended situations in the future. They can either overextend themselves again and suffer the consequences, or be responsible and happy living within their means. This has been a tough 2-4 yrs for many. And I think if given this kind of opportunity - many will be content with their lifestyle and set goals and levels of success in steps, rather than with irresponsibile behaviour.
Will this take monitoring? Sure it will. But that would be an excellent new job creation scenario. Every State, Ever city would have monitoring auditors if you will. They would receive the credit withdrawl application, someone would have to contact a title company who in turn contacts the mortgage company, bank, car loan officer, 401 K, college fund, health insurance..the jobs are endless. They will need more employees, more jobs for the US, and buildng a stronger economy.
As for the two fold on the price increase moratorium. If things are bought in the US, this will stop price gougeing from our own US retailers. And deter overseas importers from overcharging us too. Because if the US can't increase their prices, they they sure aren't going to buy from overseas at a higher price.
So i'm not an economist. But I think if somone looked at the logic of this idea and did their professional examination, review and put it into a real program - It would work fantastically. For the Americans, for wall street, for the auto makers, and for the Economy.
Thanks for listening.