Here’s my proposal. Let’s spend x-hundred-billion dollars — and I do mean let us because you do know that’s where that future taxpayer money comes from, right? — and just buy the houses from the banks. Pay the remaining principal — I’m even open to paying the difference between equity and fair market value — on the mortgages, and let the banks eat the remaining interest. They’ll have their capital, and rather than taxpayers paying twice — once via the bailout and again via the payments on the mortgages no one can afford — we’ll pay once and own something of concrete value rather than just bad debt. And, the banks will have to figure out their own messes with the capital — and the new oversight restrictions, I’m all for those, especially the salary capping part.
Once the government owns the actual houses, a lot of things could happen. We could reinstate the personal bankruptcy system so that people could declare bankruptcy and move on from those obligations. We could institute a rent-to-own policy with regard to the houses people are in; with a shorter timeframe but no interest, people might actually be able to afford to stay in their homes. We could rent the unoccupied ones to people who needed to downsize from their McMansions. We could bulldoze the vacant McMansions and have government-owned property that could be used for all kinds of exciting things.
My point in all of this is: the possibilities are quite nearly endless, so why are we only talking about a plan where the banks get to keep (1) the money, (2) the houses, and/or (3) the interest income? That seems, well, completely asinine. I’m sure there are nuances of the agreement that I’m missing; I’m actually not at all sure of that, but consider this is the I’m-just-talking-and-MBA-blather-is-not-welcome-at-the-moment warning flag. Really, though: could we please just delay this a few months until the executive branch is run by people who are not complete [fill in the blank with your favorite expletive]s? I am sure there are lots of creative solutions out there, and if the government can not just keep the airlines in business by massive tax subsidies but also own the physical airplanes that they lease, surely we can calmly and rationally consider the benefits of actually owning the properties in question without getting ourselves all in a twitch? Empty land would probably be quite a bit preferable to empty houses, for reasons that I’m sure the community groups who protested the developments from the beginning would be glad to share with us.
At the very least, can we next time nationalize something valuable like oil, or gas, or minerals? Please?
It’s my wild-eyed socialism talking, but for quite a long time I’ve been thinking that the world needs to go Old Testament and have a jubilee year, where all debts are reduced to zero, which is what ancient Israel did every seven years. No debt anywhere, and the creditors eat everything. Of course, a hell of a lot of people would go right back into debt after the slates are wiped clean, but it would provide the asleep-at-the-wheel regulators a chance to sober up and not let things get so far out of hand. I would also be amenable to the government stepping in and saying everyone who lives here gets one place to stay for free – a house, an apartment, a condo, a McMansion, whatever. It’s yours, and you don’t have to pay any rent or mortgage on it; just pay for whatever utilities you need and your fair share of property taxes. And no putting your one home up for mortgage or collateral or anything like that; you can live there and make all the improvements on it you like, but you can’t piss it away. If you want a second, third or seventh home, by all means, get a mortgage and do whatever you want with it, but as for your starter home, that’s untouchable space as far as the moneylenders are concerned. Ah the heights to which utopian dreaming can take you … as well as the weariness of 20 years of renting :)
Oh man, yeah: debt forgiveness. What a novel concept. Don’t let me get started on the ‘debt’ of formerly-colonized nations toward their imperialist oppressors. ‘I know we took all your natural resources and sold them for profit, took and sold many of you for profit, broke up your family and ruling structures, and exploited your labor to profit even as we made you build our roads, homes, and hotels and then bring us our martinis while shuffling like fools. Nonetheless, now that you’ve risen up and run us out as the charlatans we are, please pay us for all that, um, infrastructure.’
Like I said, don’t let me get started.
And, I started this comment intending to tell you about this site if you haven’t seen it already: Buy My Shitpile.