It's Time For A Homeowner Bailout

Here is how we can give a bailout to homeowners, and it will also help the banks.

Assume Michael and Jan have a home mortgage owing the bank a principle of  $300,000.  The home has a market value of $200,000.  Bailout funds for the difference in the principle amount of the mortgage and market value, $100,000, can be paid to the bank, but the bank must re-finance the home for $200,000, at no re-finance costs to Michael and Jan, and at a fixed rate of 3.5% for the term of the original loan.

This will lower the monthly mortgage payment for Michael and Jan, considerably.  The money they save can be used for "frivolous" things, such as food, clothing, education, medical coverage and perhaps even a family vacation they have not been able to take for years.  They may even be able to put some money into savings to replace money they had to use to make mortgage payments over the past few years.

This kind of  "frivolous" spending will actually stimulate the economy, instead of lining the pockets of bank executives whose poor management lead to the need for a bailout.  Members of congress all agree there is a need to stimulate the economy.  What better way to stimulate the economy than to allow Americans to spend their money for the things they want and need?

Of course, no member of congress would think to help their constituents in this manner. The President is proposing more government guaranteed, thirty year home mortgages with a 5% down payment, which is exactly what got us into the mess we are in now, and it does nothing to help those who are now in foreclosure, or facing foreclosure. 

Does anyone wonder why no politician has proposed a bailout for homeowners, such as the one I propose in the preceding paragraphs?  Should you ask them why?

Yes, and when you ask them why, remind them that you will be at the polls, casting your vote for their re-elections.  Remind them that each bank executive who received millions in bonus pay after the last bailout casts only one vote.  The did so while foreclosing on millions of constituents.  Why do members of congress protect bank executives bonuses while they watch their constituents being evicted from their homes?

Reverse The Terms Of Bush And Obama

Imagine for a moment that President Barack Obama was elected to The Oval Office during the eight years President George Bush actually sat behind the desk.  Then imagine that President George Bush was into his second term, as President Barack Obama is today.  Where would we be now?

Today two unemployment percentages were posted on Twitter.  One was tweeted by a Democrat, the other was tweeted by a Republican.  The Democrat tweeted that the unemployment rate is down to 7.6%.  The Republican tweeted it is actually 14.3% if you include those who are under-employed.  There is no doubt in my mind; the percentages quoted by the Democrat and the Republican would be reversed if the chronological order of the Presidents were reversed. 

Keep the percentages in mind, we will come back to them.  First, let's examine that reverse in the order of the Bush and Obama administrations.  President Obama would have dealt with the terrorist attack of 9/11.  He would also have dealt with the Katrina disaster.  President Bush would have inherited the home loan mortgage mess, dealt with the a downturn in the economy and high unemployment.  He would also have been in office when Bin Laden was located and had the opportunity to take out a terrorist.

Would either of these men have handled the aforementioned events differently if there terms were reversed?  We don't really know. Democrats and Republicans alike all have their spins with respect to how their man in The Oval Office would have managed events that transpired during the other man's administration.  Sometimes, the spins are interesting to read, but those spins have the benefit of hindsight and literally no benefit with respect to resolving the issues we face today.

I'm sure you can imagine how each party would be spinning exactly opposite of the way they spin events now if the terms of Bush and Obama were reversed. That is a major issue with politics.  It's all about the spin.  Party leaders, strategists and talking heads do not care about the truth.  Sadly, politicians spend too much time pointing fingers and creating spin.  If they spent as much time actually doing the jobs they were elected to do, there would be no need for spin.

Now, let's revisit the aforementioned unemployment numbers.  It's obvious that unemployment can be calculated in many different ways and it is also obvious the aforementioned percentages were calculated using different sets of data.  Let's assume the basic math used to calculate both percentages is correct.  Using two different sets of data rendered two different percentages. 

I am a blogger in my spare time.  In real life, I am an accountant and have been for over forty years.  I can give you another ten or twelve more ways to calculate unemployment percentages, and ten or twelve different percentages.  The math is simple; divide one number by another number.  Even I cannot screw this up if I key the right numbers into a calculator.

Why not just compare the employed and under-employed percentage week to week without comparing those numbers to each other. Some members of congress who have no clue what to do about the issue may want to track those percentages, week to week and continue to spin their reasons for failing to fix the issues of unemployment and under-employment.  I would rather see members of congress implement action plans to reduce both numbers.  Just do the job and the numbers will take care of themselves.

To the members of congress who use the 7.6% and 14.3% numbers to support their respective spins regarding unemployment, I have only one question.  Does it matter which number you track to support your spin?  To those who are unemployed, and those who are under-employed your spins do not matter.  What matters to the unemployed and under-employed is that congress cannot find a way to work together to put the unemployed back to work and the under-employed into jobs for which they are are trained.

Members of Congress are masters at spinning their points of view.  Spinning their points of view got them elected to office.  All of them are still spinning points of view, hoping you and I will forget that they are not getting the job done.  If you forget they are not doing the job, maybe they will keep the job when you go to the polls to vote for their re-elections.

There is a great line in the movie, Best Little Whorehouse In Texas, that is fitting with respect to politicians and spin.  "I just got a brand new bullshit detector, and I can tell when someone is pissing on my boots and telling me it's a rainstorm".  My boots are wet and it's not raining.

Many who are unemployed and under-employed will go to the polls, in 2014 with their boots wet, and not from a rainstorm.  They will remember those who are up for re-election gave them wet boots, finger pointing and numerous ways to calculate unemployment percentages.  They will also know the candidates who are pleading for re-election did nothing to fix the problems they are facing.

The spin (bullshit) candidates used to get to congress should not keep them there. The unemployed and under-employed all have bullshit detectors, otherwise known as common sense.  Common sense tells everyone that members of congress are not doing the job.  Perhaps it is time for the current members of congress to update their resumes and join the ranks of the unemployed and underemployed. 

I truly believe this suggestion will help; no sarcasm intended.  I suggest that members of congress approach their jobs as if the terms of President Bush and President Obama were reversed.  It will cause them to reverse their spins and look at the other side of the argument.  After each member reverses his/her spin and realizes how easy it is to argue both sides of an issue, forget the spin, go to work and solve the problems.

Serving the people of America is a privilege that carries enormous responsibility.  There is actually work to do.  It is a real job, not a numbers game.