What if the Government had paid off Mortgages with the Bailout Funds?

According to this listing, on CNN.com,
the government bailout monies have been pledged as follows-
700,000,000,000(TARP)
6,400,000,000,000 (Fed)
1,200,000,000,000 (Stimulus)
182,000,000,000 (AIG)
45,400,000,000 (FDIC)
1,700,000,000,000 (Other Financial Initiatives)
11,000,000,000,000 (Other Housing Initiatives)

Note- this is the total monies pledged, not all of it has been used.

If one totals up the amount, and divides it by 200 million ( a rough estimate of people over 18 in the country that have a mortgage), there appears to be more than enough money to pay off mortgages, with some left over.

Just imagine if the government, instead of giving the banks etc... this money- they had just went ahead and paid off all mortgages in this country.

Poof. Banks get the money owed, people have their biggest bill paid off, and therefore can pay down their other debt, and financial security is had for all.

I realize this is an ideologic approach,
and many poor people do not have a mortgage,
however, imagine if the money had been used in this way.

Seems to me that the economy would've been strengthened much more.

I realize I will get responses of "people need to take care of their own bills", "the goverment
shouldn't pay off anyone's house" etc...
But it seems to me that this kind of "bailout" would have been most beneficial to
American citizens and the economy, period.


Thoughts?


money.cnn.com...

Better yet. I read that the bailouts work out to approx $350,000/taxpayer. Give each taxpaying citizen that money. Then watch the economy blast off!

reply to post by thegoodearth


I have been saying the same thing for years. I have yet to hear a satisfactory answer as to why it would not be a good idea.

Originally posted by BomSquad
reply to post by thegoodearth

 

I have been saying the same thing for years. I have yet to hear a satisfactory answer as to why it would not be a good idea.

It would not be a good idea to "free the slaves"; now would it?

I totally agree ..... last thing they shudda done is give the money to the banksters.

Here in the UK the government/taxpayer owns at least one high street bank, RBS and a big chunk of Lloyds as well.

These banks are still paying themselves huge bonuses, the government says its looking at ways to stop this. One of the fears is the banks will move their hq's abroad ....... ..... how the hell can that happen when we own it.

As owners we should be able to say where the bank will hq, who gets paid what, and what the money gets used for.

Somebody please explain what I'm not getting.

Originally posted by bigyinSomebody please explain what I'm not getting.

Ahh, I see your mistake. You think your opinion matters. Seriously though, the only way we will ever get a voice in this process is to take it.

People want to talk about devastating hyperinflation on here, but that's exactly what this would have done.

You pay off everyone's loan, then you don't have any money leaving the economy through interest, which causes a sudden burst in the money supply. You free up all kinds of money and yes, the economy would boom - it would be the biggest bubble ever.

By the rich getting paid and the poor not getting paid, the view is largely held that each got what they deserved. We extend unemployment, and lower taxes and all is well. This is the way our country works. Those who did well in school believe they are entitled to everything and anything they want and will do anything to take it from other people. Those who didn't do well in school believe they are doomed to failure and never expect to be able to earn a decent wage.

Man are we stupid.

It sounds like a good plan, unfortunately the real issue wasn't just the bad debt (what they want you to believe) but the over leveraged bundles of this debt. The entire banking bubble was financed on worthless instruments, so even if the mortgages were paid up, by the time you've paid it it isn't about the mortgage any more. That mortgage was already sold on a dozen times, and at each level the financial institution was investing ten, twenty, fifty times that amount....

It may have been a solution to personal bankruptcies and the housing market, but in the end the credit crunch would have happened, because the bubble was reliant on worthless trades.

It will happen again, as long as the governments of the world keep bailing them out, as long as we let them.

All the best, kiwi NWO

I appreciate the responses...
This is a question that has plagued me for some time...

If they were already going to "hyperinflate" the economy,
then they should've just paid off the loans.

Instead of handing out trillions of dollars to the banking elite,
for them to manipulate further to their advantage.

I agree....pay them all of...the money goes to the top anyway.

The only problem is you'd have millions of others ticked off because they still have to pay their mortgages because they can afford it.

Can you imagine the FEEDING FRENZY this would have been for Fox News?

Anyway, keeping people in their houses would have kept housing values UP instead of DOWN.

The whole thing was BS.

....................

....................

WAIT...WAIT A MINUTE!!! WHAT AM I SAYING.

THIS IS TRICKLE UP ECONOMICS!!!

WE ALL KNOW TRICKLE DOWN IS WHERE IT'S AT!!!!!!!!!

Forget everything I first stated. God Bless America.

reply to post by David9176

Actually, my idea was to give Every Taxpaying Citizen $350,000. Almost all of us would be debt free then. House not paid off? Now it is. Don't have a house? Buy one for cash. With what is left over either save(smart move) or blow and stimulate the economy.

No each tax payer would owe $350,000 plus interest. The government fed/local would not be forced to cut its work force nor re evaluate employee compensation, nor consider cutting earmarks. Big business bonuses would still be getting bigger.

reply to post by David9176


My idea was to pay off every mortgage in the country.
Period.
The money is there, and it would be better than watching BOA, Citi, and all the other
evils making money off our tax money and laughing up their sleeves-
while everybody suffers under this ecomony.

Forgive my lack of understanding of economics, but unless the Federal Reserve actually created some more money out of nothing (like usual) for the mortgage 'bailouts' that you propose, there wouldn't actually be any inflation because the amount of money in the country would still be constant. It would just be in different hands, i.e. the people's hands.

reply to post by sonofliberty1776



then all those unemployed could actually go back to work at those jobs with pathetic wages!!
then....the fact that all these mortgages, or at least most of them it seems, has a paper trail that is so badly kept, the banks can't legally foreclose on them...and well....possibly give anyone a clear title if they are paid off....
hey, the fact that housing costs would go down might even effects the eligibility of many of the food stamp, medicare, hud, ect recipients...thus saving the gov't a few bucks!
it was just too, too logical for them to consider...and just too uncomplicated!!!
and, it would have left so many less dependent on our fine gov't and their handouts....
it was infeasable!

it would have brought the cost of living down to something that would have been a little more manageable, made us more able to bring our workers into a position where they would have been better able to compete with the overseas labor....
that in itself would have compensated for the hyperinflation pressure to some extent.

but, na, it's just us spoiled americans wanting a hand out.....never any mention of those spoiled bankers who can live without their year after year higher bonuses and more costly company parties and getaways....

the government doesn't work for the people, it works for corp america..the only thing that does seem to be doing good now is wall street!

anyone notice how quickly the investigations into the bank's fraud was dropped off the mainstream news with wikileaks? still say they completelly blew up the housing market and now most of us don't have a chance in hades of getting a clear title, even if we pay the mortgages off! so why is it, we are ending up payinig them twice over, three times over if you consider the interest?