Ok, I’m not an expert on this at all, but what if we structured the bailout this way?
The present plan is to feed the money to the various companies that made poor investment decisions, and nothing to the millions of Americans that are losing their houses. So we reward the rich and do nothing for the poor. What if we reverse this?
We pay nothing to the banks. Instead, the governemnt will step in and help with any mortgage that an individual is having trouble paying. This not only helps individuals, but it makes the loans safe and thereby secures our financial system. But we do it with the following caveats (percentages applied are WAGs):
- The individual owing and the company holding the loan agree to all of the following terms.
- Any balloon payment is folded into the loan under the loan’s terms.
- The loan interest rate is dropped 0.5%.
- Whatever percentage of the loan principal the government pays, it now owns 1.1X that percentage of the house, to be paid to the government when the house is sold.
- Whatever percentage of total assets an investment house has that the government is paying on, the government gets 1.1X that percentage of the company in stock.
- All employees at companies receiving these indirect government payments have total compensation capped at the salary level of the President of the U.S. – until they no longer are receiving payments that come from the government.
- Existing senior managers and board members of all companies involved must do 200 hours of community service/year as long as they are receiving indirect government payments.