The masters of our American economic universe have all mismanaged banking, government, big business, and wall street. Many of these leaders are continuing to transfer the working man’s wealth into their own bank accounts during our crisis, and I wonder if it was an ingenious master plan. These leaders are supposed to be the smartest in their professions. Could they not see where these policies and practices would lead our country.

There are many factors that have brought us to this new landscape. I believe our high US standard of living would never allow us to compete in the global economy. We should never have let our manufacturing die off by buying the huge amounts of cheaper imported goods. We should have continued to buy american made products and paid more for them, simply because it kept neighbors working fostering domestic trade.

Big business has led to the decay of economy. It may improve production efficiency and strive to lower costs, but it limits competition and reduces the need to improve quality or be innovative. The export of our wealth began with the oil embargo of 1973 and when Americans started buying foreign cars it added to a growing trade deficit. Then electronics, toys, clothes. We have exported our savings and now borrow from foreign bankers to keep feeding our consumer addiction.

Americans need to pay more and unfortunately do with less by trading chiefly with fellow working americans.

President Obama said it during his inauguration speech, “we need to make things.” and further we need to buy the things we make. So if you are driving that nice BMW or even a camry, take credit for making a good value decision, unfortuantely you put your neighbor out of work and now they can’t buy a home from you, or hire you to landscape it.

Thanks
Joe

These are my ideas for fixing the current financial problems. I am a stay at home dad. My solution to this problem reflects a common philosophy about raising children. Punish bad behavior and reward good behavior. Please read. If you believe this plan will work, please contact your congressperson http://www.usa.gov/Contact/Elected.shtml .

Summary
· Lower the interest paid on mortgages from 6% to 4% for people with good credit.
· Lower it to 2% for anyone currently serving in the military.
· For people that default on loans automatically deduct 20% of their income from their paycheck until their debt is paid
· The government should buy large shares of bad banks and not their debt
· Outlaw rising rate loans and raise the standards for getting loans
· The government should give the automakers the money they need with conditions. They need to use 50% of the money they receive to retool abandoned plants to produce wind powered generators and solar panels
· The government would need to assure all automakers that large SUV’s will be phased out in the US market regardless of oil prices. This can be done with higher fuel mileage standards and will allow everyone to concentrate on fuel efficient and electric vehicles
· The announcement of the new mortgage rates and the massive amount of home sells would cause the sock market to take off like a rocket. Sock prices would rise extremely fast. Home values would rise, 401K’s would recover, and the bank stocks own by the government would rise
· The government could take profits like any other investor and recover their loses in a matter of days.

Details
Most people would agree that the source of the current financial problem is the failure of the housing market. I believe this problem can be fixed fairly easily. We should reward people with good credit and people who serve in the arm forces. Lower the interest paid on mortgages from the current 6% to 4% for people with good credit. Lower it to 2% for anyone currently serving in the military. This was done after WWII and was very effective.

The people that defaulted on their loans did not disappear. Most are still working and collecting a paycheck. These people can be punished by automatically deducting 20% of their income from their paycheck until their debt is paid. This method is already in place to collect back child support. This would also discourage additional people with negative equity from walking away from loans.

Repairing the housing market will fix the banking crisis. The government should punish the bad banks by keeping large shares of these companies and not their debt. The government can reward healthy banks by allowing them to purchase bad banks at discount rates. They should also outlaw rising rate loans and raise the standards for getting loans.

The Big Three problem is the most difficult one to solve but not impossible. The government should give the automakers the money they need with conditions. They need to use 50% of the money they receive to retool abandoned plants to produce wind powered generators and solar panels. During WWII GM retooled to produce airplanes and tanks in a matter of mouths. The auto industry could be their own first customers buy installing solar panels on every auto plant. The reward for cooperating would be the loan itself and a potentially share of revenues generated by the alternative energy sources. Punishment would again come in the form of company shares. In addition, the government would need to assure all automakers that large gas powered SUV’s will be phased out in the US market regardless of oil prices. This can be done with higher fuel mileage standards and will allow everyone to concentrate on fuel efficient and electric vehicles.

Why will all this work? We have roughly a million people in the arm forces. All of them have guaranteed jobs and paychecks. This is a realtor dream come true. Service man and women will see 2% mortgages as a change of a lifetime. They would be right. The result would be thousands of new low risk loans. The 4% loans would cause millions of people to refinance. Real estate investors would also see this as a chance of a lifetime. Mortgage crisis over!

The removal of all this bad debt and billion in deposits and fees would sure up the banks. One byproduct of all the action would be thousands banking jobs to handle the volume of new loans. Banking crisis over!

The government will acquire the land it needs to make alternative energy work. The will of the citizens of the US to remove themselves from the grip of fossil fuels will require thousands of wind powered generators and solar cells. The government and utility companies would finance these projects in exchange for revenues generated by the energy they produce. This gives the Big Three customers to sell their new product line too and diversifies their portfolio of services they provide. Thousands of new jobs created. The large investment in alternative energy would drive down energy cost. This would give the US a huge advantage over the rest of the world. Big Three crisis over! Global warming crisis over?

The announcement of the new mortgage rates and the massive amount of home sells would cause the sock market to take off like a rocket. Home values would rise, 401K’s would recover, and the bank stocks owned by the government would rise. There are billions of dollars in investment accounts waiting for an economic turn around. This means sock prices would raise extremely fast. The government could take profits like any other investor and recover their loses in a matter of days. Wall street crisis over! Bailout over!