By Carl Sampson
Today, I’ll take a few minutes to cure the current economic “crisis,” otherwise known as the screw-up hindering our kids’ future.
There’s not enough time to explain how we got into this mess plus anyone who has picked up a newspaper has seen more than he could possibly bear. All I can say is greed and stupidity are a toxic combination, and I doubt I’m the first person to notice that.
The question, though, is how do we get the wheels turning again without hanging a bajillion dollars in debt around the necks of our kids.
Congress in recent months has been spraying money across the countryside, but really hasn’t addressed how to fix anything. Oh, they cooked up a half-baked plan to spend tons of money on stuff, hoping that would kick-start the economy. And they offered a “rescue” package for folks whose mortgages have turned into financial boat anchors.
The really sad thing: Every penny that is borrowed means my kids and yours will be stuck with the bill.
So what’s next? Where do we go after all the money has been spent? Here’s Carl’s Three-Step Cure-All for Our Economy.
• STEP I: Convert the money the administration and Congress has “invested” in Wall Street into a loan. How? By adding a $1 fee for each stock transaction on the New York Stock Exchange or any U.S. exchange, including the commodity exchanges, where much of the real damage was done. Whether you buy or sell one share or 1,000 shares, you pay a $1 fee. Billions of transactions take place each month, so after a few months, all of the money would be repaid.
What a minute, you say. That would give overseas exchanges an advantage. Maybe, but foreign economies are in the same sorry shape as ours is, so wouldn’t it make sense to for them to do the same? Just a thought. …
• STEP 2: Require banks to renegotiate all mortgages with the federal government guaranteeing half the amount of the renegotiated loan value. Let’s say I have one of those zippy “exploding ARM” mortgages. I’ll not comment on the wisdom of taking out a home loan whose interest rate would shoot through the roof after a few years, because that’s another story.
Congress would require all lenders to sit down and renegotiate the terms of all home mortgages. All of them would be eligible, so the folks who have worked hard to keep current on their loans would benefit as well. The interest rate would be the prime rate on the day of closing (at this writing, it was 3.25 percent) and the terms would be 30 years, with half of the principal guaranteed by the federal government. The loans would be assumable, but the interest rate would be the prime rate at the time of that transaction.
Oh, and the banks would be required to pay a percentage of the loan balance into a fund to cover the government’s half of any foreclosures.
• STEP 3: Those Wall Street “executives” who helped themselves to fat multi-million-dollar bonuses after they cratered the financial system would be required to pay a fee equal to the amount of their bonuses plus interest.
Sorry, fellas, but my kids aren’t going to finance your stupidity and greed.