A Simple Solution To The Mortgage Based Economic Chaos...

As to Treasury Secretary Paulson’s request for a $700 billion dollar blank check from the taxpayers: Absolutely NOT!!!

Yes, to a bankruptcy court’s ability to restructure debt secured by one’s home or property.

Property’s owner: keeps their property, if they are deemed fiscally qualified to pay the restructured loan.

Mortgage Holder: makes some money, less than they’d preferred, on the note.

Investors in risky ‘mortgaged-backed’ paper: get what modest return, or lack thereof, that one should expect from a risky investment.

Simple, straightforward and it costs the taxpayer, who wasn’t previously involved in any way shape or form, very little.

Mortgage woes to be billed to taxpayers, again!

Wall Street is suffering from mortgage loan abuse that it inflicted on itself, and the only thing that former Federal Reserve chairman Paul Volcker can think of is another federal bail-out like the Resolution Trust Company (RTC).

Remember that the RTC was created to use taxpayer money to fix problems created by the folks charged with home loans, the Savings and Loan (S&L) industry players. The charter of the RTC specified that the agency would not investigate, nor would it turn over to investigating agencies of the government, any evidence that a crime might have been committed in the razing of the S&L businesses.

A little over two decades have past and here, again, we are dealing with huge economic woes caused by players in the home loan businesses and Wall Street’s money (paper with monetary value; we’re told) manipulators. Once again taxpayers are being called upon to bail out the players, without consequences for said players!!!

I think not!

Home loans can, in a single transaction, put large quantities of money on Wall Street’s field of play, and that money is then toyed with; while lobbyists for the players successfully request the government regulators turn a blind eye.

A better solution to this problem is to let the Bankruptcy Court system restructure the debt that is secured by one’s own home; currently they are not legally able to do so. This is necessary because the loans that are the largest percentage of the failures have always been called sub prime; for known, good reasons. Another kind of loan that is prone to failure is the Adjustable Rate Mortgage (ARM), because it’s sold to less qualified borrowers at rates that will ultimately be most profitable to the lender; most burdensome to the customer.

These money manipulating players need serious regulation and accountability, because they have repeatedly proven their ability to throw prudence to the wind in pursuit of profit; then call for the taxpayers to save them from themselves (without consequence, of course).

How long will it take voters to realize that they are the customers (borrowers) being abused by this process? The voters must inform their legislators that this situation needs to be controlled, once and for all, or they’ll be replaced by those who will.

A couple of things to rattle your cranial capacity, again…

First:

The GOP campaign has already begun to issue statements to the effect of, “the Democratic majority in the US Congress is responsible for all that is wrong with the USA today.”

If you believe that, have I got a bridge for you!

The Democratic majority in the US Congress decided to put its foot in its collective mouth and promise that, starting in January of 2007, things would be different. If their brains had engaged before their mouths, they would have noted that they did not have a veto proof majority in either the House or Senate. Also, the super-majority parliamentary rule (used by both parties when they found themselves as a slight minority) in the Senate could, and did, stop all the Democrat’s initiatives before they ever would reach the President’s desk.

For those reasons the Republican party’s defective government (the W admin. plus a Republican majority in the House and Senate) from January 2001 till December 2006 is responsible for the financial crisis (that started as a problem with subprime mortgages), the incredibly huge federal budget deficit, the consistently large monthly trade deficit, the incomplete effort in Afghanistan, the wrong war in Iraq, the stagnant middle class income, the disparity in wealth twixt the rich and the middle class, mass job exportation, etc…

If Republicans are not willing to own the consequences of their actions, perhaps they should not have caused them.

Second:

How outsourcing tasks to contractors saves anyone any money, even as the contracting company makes a substantial profit:

First, do the outsourced task poorly.

Second, move the work to a country where the prevailing wage is substantially lower than in the USA.

Third, the aforementioned other country need have weaker (or selectively enforced) environment, health and safety laws.

Forth, (as in the current war zones) make no-bid contractors completely unaccountable; contracting already provides substantial cover from accountability.

That’s all it takes. How do the executives that make these outsourcing decisions sleep at night?