IMMEDATE ACTION REQUIRED

Stabilize the System Now!!!

The current economic turmoil is due to the writing of loans to people with no ability or desire to repay them. The only surprise comes when banks are shocked that there are defaults. Banking Institutions complicated the situation by repackaging the loans and reselling them to investors. Their consciences must have seared because they reached out to Insurance Companies to get pseudo policies on the investments and the Insurance Companies not wanting the policies to be regulated called them “Credit Default Swaps”. Without the normal regulation on insurance policies the insurance companies pocketed 100% of the premiums and kept no reserve against the Swaps. This is what happens when you build on a foundation of quicksand. The original mortgages were questionable at best. Leveraging them on a 40 to 1 basis was pure idiocy.

Now the economy is in a downward spiral. We get all excited when the pace begins to slow but whether it is moving at five miles an hour or 100 miles an hour it is still flowing downward in an orderly shutdown of the entire economy. If something isn’t done to turn the tide this could be the worst depression in the Nation’s History. If the downward momentum is not stopped we will continue to have cost cutting measures and downsizing until there is nothing left to downsize.

IMMEDIATE ACTION IS REQUIRED

Every bridge to nowhere needs to be eliminated from the Federal, State, County and Local Government’s budgets. This is not a time for partisan politics it is a time for all of America to Unite to solve a crisis. All people from all parties need to put aside their ideological differences and come together to pass immediate legislation eliminating any and all “bridges to nowhere”. That means projects for the defense industry that serve no purpose, literal bridges to nowhere, studies, fat, earmarks, etc. all need to be eliminated.

Real Estate must be stabilized. The Federal Reserve Board’s powers must be increased to immediately loan money to banks on real estate as well as their deposits. Any note held by a bank that is backed by real estate in the United States can be borrowed upon up to 75% by the banks and 80% if the property has solar power. Banks are then authorized to loan to individuals and businesses regardless of credit history up to 70% of the value of the property (75% if the property has solar). This will immediately unfreeze the credit markets. Banks that foreclose on a property can hold that property on their books for up to a year and are allowed to list the property with a realtor for an orderly liquidation with provisions for extensions if the property does not sell. Currency will not only be backed by the full faith and credit of the United States of America but also by the Real Estate of America.

The underlying problem is real estate’s free fall. By stabilizing real estate we stop this downward cycle. Inaction will lead to tragedy.