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Bailout Alternative: The Lender Stimulus and Debt Relief Package

Discussion in 'U.S. Politics' started by Oscar, Sep 30, 2008.

  1. Oscar

    Oscar New Member

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    I've got this idea that I think will help, and I don't know how to tell people about it.

    Anyway, you've probably heard all the hype about how we need to pass this bailout package (AKA rescue package) right away so American businesses have money to lend again before it is too late and our nation enters a severe recession and people lose their jobs, savings, financial security, etc.

    Nobody seems to like the government proposal because it buys bad debt off of companies using taxpayer money. It other words, it is corporate welfare. However, people on TV are aggressively trying to sell this plan to us using the false logic that we have to do it because doing nothing is not an option.

    There are other options to solve the credit crunch so that lenders have money to lend again. Below is just one option I came up with:

    The Lender Stimulus and Debt Relief Package

    This plan gets money back in the hands of the lenders who have a history of making good loans to the American people. Like the government plan, this plan uses government/taxpayer money, but it does so in a way that benefits taxpayers, providing a solution to the credit crunch while at the same time providing much needed debt relieve and economic stimulus. This plan holds businesses accountable for the loans they made and also holds people accountable for money they borrowed.

    The details of the plan are as follows. The government will give each taxpayer a fixed amount of money with the condition that if the taxpayer has debts then they are forced to use the money to pay off their debts. Since our nation's credit crunch is a massive problem, the amount of money needs to be large to have an impact. Perhaps a good ball park number is for each taxpayer to get around $5,000 each which is roughly $700 billion number divided by the number of taxpayers. This money can be used to pay debts like a person's mortgage payment, student loan payments, auto loan payments, credit card payments, etc. The government would send each taxpayer a report listing their debts and the taxpayer could choose which debt or debts to pay down. If a person only owes $2,000 on their car and has not other debts then the government would pay off their car and send them a check for the remaining $3,000. If a taxpayer had no debts then they get the full $5,000. Taxpayers each benefit the same amount and they are all help accountable for their debts in a relative manner.

    Since the majority of Americans have debts, the majority of the $700 billion would transfer directly into the hands of lenders who have a history of making good loans that get paid back. This would amount to a huge influx of capital that these good lenders would have at their disposal to lend again thus rescuing America from our credit crunch. Good lenders would have lots of money to lend again. Also, this would have a secondary benefit of providing an economic stimulus because people with less than $5,000 in debt would have money to spend and invest. Also, even people who did have their debts paid down or paid off would be in a better position to spend because it is easier to spend money after you remove other debts like a car payment.

    Of course this isn't a solution to fix all that is wrong with our economy. It is essentially taxpayers borrowing from their future to pay off current debts in a way that resolves the credit and lending crunch. However, even though this solution is just a Band-Aid for the current crisis, it is a much better Band-Aid for the taxpayers than the plan the government has proposed.

    Please let me know what you think about The Lender Stimulus and Debt Relief Package.
     
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