Monday, September 29, 2008

Billionaire Bailout Bonanza

With the panic spreading throughout Wall Street and the rest of the world's financial markets for secondhand debt and equity, it's no wonder no one is listening to our particular squeaky wheel. That being the case, we invite you to take what you want from this blog, and send it on to the proper quarters. Perhaps if enough people say something,
they might start paying attention. As a sample of something you could do, here's today's missive to the Wall Street Journal.

Dear Sir(s):

While everyone's attention is focused on the nearly $1 trillion bailout bonanza, very few people are asking what may be the most serious question of all: how is the federal government going to divest itself of this portfolio of distressed assets? From the orientation that got us into this mess to begin with, there are three possibilities:

* Sell the properties back to the speculators and gamblers at the current market value (a massive short sale).

* Sell the properties to foreign or domestic investors with cash in hand.

* Sell the properties to the current occupants or new buyers.

All three are essentially the same possibility, and all rely on the current or new occupants raising financing from the speculators, gamblers, or foreign or domestic investors. Since many current occupants and potential buyers lack the means to qualify for loans, we'd be right back where we started, with the taxpayer footing the bill for another, larger bailout.

That is, unless the federal government can do the same with its now near-certain accumulation of residential properties that Lincoln did with the Homestead Act of 1862. They can't be given away "free," of course — but no-cost credit (analogous to the "free" land) can be extended to ordinary people to purchase and own the homes through a proposed private sector financing and ownership vehicle called the Homeowners' Equity Corporation, or "HEC," a description of which can be found on the web site of the Center for Economic and Social Justice.

Instead of starting the cycle all over again and further weakening the U.S. economy for the benefit of speculators, gamblers, and foreign and domestic investors with money to burn, why not enact the "Residential Homestead Act of 2008"? We have nothing to lose except a deteriorating currency, hopelessness, despair, and a crumbling economy.

Contributions to CESJ are tax deductible in the United States under IRC § 501(c)(3)





No comments: