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Why are these mortgages called "toxic assets", why don't these institutions want them any longer, and why did they buy them in the first place? And if it is good for the economy to have the government bail investors out of bad investments, then will the government buy my worthless Enron stock?

My belief is that these investors took a risk when they bought what they hoped would be high yielding mortgages, and now find that they shouldn't have bought them. We should not take them over and give the lenders the money back.

Instead we need to halt all foreclosures, and then create a new mortgage through FHA, called a "salvage mortgage" where people in foreclosure on their primary residence due to fraud, hardship, or any other compassionate circumstances, can refinance with a new 40 yr. mortgage subsidized by the gov't at half the going 30 yr. fixed rate, and then give up half the future appreciation in their home. If circumstances improve, they can refinance later and get their whole equity back if they repay the subsidy cost, so that either way the government won't be out money and people won't be kicked out of their homes.

By helping people in foreclosure, mortgages would get repaid, and that would take assets off lender's hands at eventually no net cost to the public, and it would help the little guy on Main St. which would end up helping the big guy on Wall St. If we bail out the big guy on Wall St. it's not going to help the little guy at all, and Wall St. will soon be back with another scheme to get money out of us, claiming that is the new "fix" that's needed to save the economy, when what our economy really needs is subsidies for energy self sufficiency making alternative energy equipment here in the US with American workers.

In Germany, banks have to give people low interest loans for solar and wind investments in a person's home, and the utilities have to buy the electricity at a high enough rate to pay entirely for the loan. That is the kind of bank/utility intervention our government needs to engage in, not giving a trillion dollars to investors who made bad decisions.

If we spend this money on Wall St., we're not going to have it to really help our economy after the bail out plan doesn't work anyway.

No bail outs for Wall Street!

posted 3 years, 8 months ago
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