Saturday, November 29, 2008

Mortgage Crisis-Direct government loans to homeowners

While $$$$ is being poured to the banks that made/ pushed such crappy home loans, homeowners haven't been helped and have been foreclosed en masse.

Of course homeowners who DIDN'T buy more than they can afford, and DIDN'T used their house as an ATM to buy Cadillac Escalades and 80" plasma flat screen TV's, object to a government bailout of homeowners who did such things--though this means homeowners who didn't game the system but have been caught in the economic squeeze are left in blowing in the wind.

As our goal is to avoid foreclosures (while it is nice that I don't have a next door neighbor with their yapping dog--their brown lawn does hurt the rest of the block) why doesn't the government subsidize loans for anyone claiming hardship. For a $175,000 loan at 6% the mortgage is $1050. If the government can buy the loan from the bank and subsidize/ discount the loan to 3%, the mortgage is now $740 a month--a saving of $310 a month.

But there would be a catch to this government largess--as the program is intended to keep one in their house, not allow one to trade up and up and up every other year until they reach 5,000 square feet.. The government would become an equity lien holder in all subsidized homes--and get 20%, 30%, 50%? (based on years until mortgage is paid off) once title changes. The goal being that real estate prices would eventually rise and the feds would recoup their investment, and struggling homeowners would now have an out.

Saturday, November 8, 2008

NO Corporate Welfare for the US Auto Industry

No one wants the US Auto Industry to go under--especially to protect their work force. Even though one remembers when Chrysler got a bailout in the 1970's, ostensibly to protect their workers, and they dumped workers from their Poletown Plant when they automated. But no welfare for the US Auto Industry either--the industry that kept bringing us bigger and bigger cars in the hopes to turn a bigger profit per unit, and little crappy cars (Gremlin, Pinto, Vega) that were just throwaways.

How about a plan that will help the auto industry, consumers, auto workers and the planet. Government rebates to the auto makers and consumers for every fuel efficient car sold in America.

For every car made in America ( Toyota's from Tennessee count--re branded Mitsubishi's like the old Dodge Colt don't) that gets good gas mileage--the American consumer and auto company get cash from Uncle Sam. For example:

Car gets over 30 MPH--Government gives auto maker $2000 and consumer a $4000 rebate
Car gets over 40 MPH-Auto maker gets $4000 and consumer $6000 rebate
Car gets over 50 MPH-Auto Maker gets $6000 and consumer $8000 rebate

50,000 car rebate would cost around 500 million. Much less than the bailout asked for, and auto industry could cut their rebates back, to make more $$$ on each unit. Think the Hummer and the Escalade--the official car of Antioch subprime mortgage holders who took out a 2nd, would virtually disappear.