When will these idiots grow up?
And when will they stop treating us like we’re stupid?
They stubbornly refuse to admit they’re lying when they claim things like “the financial system isn’t broken” or “consumers can afford their debt, they just need a little more flexibility.”
All they’re achieving with these lies is the prolonging of the economic pains and the delaying of the inevitable correction. Not stopping. Delaying.
Until those in power are willing to have an adult conversation about our situation, don’t expect any economic rebound of consequence. Instead, this is what you have to look forward to…
Unworkable, Unsuccessful Programs
Right now, one quarter of all homes with mortgages are under water. This has led to two very odd situations. One, Americans are not moving to pursue employment opportunities because they can’t sell their home. Two, Americans are simply throwing up their hands in surrender and choosing not to repay their mortgage at all.
As those in charge would have us believe, this is not a problem. “Consumers are fine. The economy is fine. All we need is flexible payment options to take the edge off.” So we get a flurry of feel-good stories about the power of Congressional or bank-sponsored programs that work with borrowers to modify loans to make them more affordable.
The parameters of these programs make them unworkable and therefore unsuccessful. We don’t need any more non-solutions like these. What we need is decisive action. Period.
Remember, back in the late1990s and early 2000s as homes moved steadily higher, the risk of foreclosure fell dramatically. If a borrower could not repay his mortgage, it was no big deal. He could simply sell the home… and make a profit to boot. Home prices moved on up, interest rates fell, and banks wanted in on the profits too. Everything went south from there.
As the system blew up, the government and the Fed implemented programs to “save the system.” This involved a lot of taxpayer bailout money (where we paid more) and watching interest rates forced lower (where we earned less). This was all done to aid bankers and borrowers… by taking money from taxpayers and savers.
No. Thank. You.
I have a better idea: profligate borrowers and easy-lending creditors should pay the price. Lenders should be forced to immediately recognize the current values of their loans outstanding – and let me tell you, it’s a lot less than they show on their books!
Next, we should create a streamlined foreclosure process to unclog our bankruptcy courts across the nation. It shouldn’t take longer than 150 days to recognize a foreclosure.
We should garnish wages of those who’ve stopped paying their mortgages. If they’re still earning but not repaying their mortgage, then they should be penalized.
Now, if Congress had the guts to put through such reforms, then we’d swiftly wipe trillions of dollars of debt off our nation’s books.
It wouldn’t be pretty, but it would be effective. Because one man’s debt is another man’s asset, this would be a brutal process.
Besides, while this outcome is harsh (removing trillions of dollars in value from the stock market through public company failures and forcibly taking funds from non-paying consumers), would you rather have the alternative… which is what we’ve got now?
The bottom line is: we need to admit the truth. There is too much debt. Using our approach, we’d go through a short, ugly bout of pain and then begin to recover. The write-offs would be in the trillions, which would save us hundreds of billions if not trillions in interest.
Now THAT is a stimulus plan.
Of course, our plan wouldn’t win us an election…
P.S. To survive and prosper in this world of lies, non-solutions and discrimination (where the responsible pay the price for the reckless), you need to hear the truth. Sometimes that truth is ugly. Sometimes it’s not. But if you want to grow your wealth, you need to hear it. That’s why I’ve recorded this video for you. Listen now.