By: shawn hartnett

shawn hartnett — Sat, 15 Jan 2011 16:34:42 +0000

I believe that the only real value that the government has left to leverage is the land that it owns, specifically the property of its citizens. The reality is that the state owns the land; always did, always will. We can’t pick up the property and move it or take it with us (The structure could be moved but it is not cost efficient and most unlikely to be done). So why do we pay our hard earned money to the banks. We should pay it to the government, at a very low interest rate. The bank does not buy the property from the seller and then resell it to the buyer. They simply sit in the middle off the table and broker a deal that pays them double the price of the property after thirty years. If they actually used their money it would be different but through fractional reserve banking they are able to simply credit the seller with the proper amount of funds due them (the selling price) and deposit it in the seller’s account electronically. If the funds are needed they could relinquish them to the seller at any time, but they could never do this for all their depositors at one time because the money doesn’t exist!
The point is that if the government held our mortgages,(presently $13 trillion in US) they could get the interest payments as a tax increase while the homeowner enjoys a significant “tax break” by paying a smaller monthly payment.
Example: Say the government offers you a flat rate mortgage with an interest rate of 1% per year of payoff. Thus, a 30 year mortgage would carry a 30% interest payment.
A current 5% interest payment on $300,000 with a bank carries a payoff of nearly $600,000.
The US mortgage described above would create a payoff of only $390,000 over the same thirty years, saving the homeowner $200,000. Divided by 360 monthly payments, that’s a “stimulus check” of over $500 per month, EVERY MONTH! This is how you create jobs.
Put the money back in the hands of the consumer who will fill the stores and force employers to hire which creates more jobs at the factories and shipping enterprises and so on. The banks have had a good run but it is time to part ways with them, at least in the mortgage business. We shouldn’t worry about them, for they will have tons of capital when the government pays to them the principle of the mortgages they hold. Let the government give them back the same worthless money that they have been wildly printing for us. The government would simply destroy the principle of the mortgage money as it came in every month from homeowners and use the interest portion to pay down the national debt. This would help offset the inflation from the newfound money in the system and if more needed to be done to curtail inflation I suggest raising the Social Security contribution to replenish that fund and remove more money from the system as needed. We are headed for inflation at our current rate anyway. Any thoughts on this?

By: Evening Blogs

Evening Blogs — Wed, 06 Aug 2008 00:52:04 +0000

[...] Three Proposals to Solve the Present Financial Crisis [...]

Comments on: Three Proposals to Solve the Present Financial Crisis

By: shawn hartnett

By: Evening Blogs