CNN iReport

The core of this problem is the artificially high value of homes: they are too expensive for the homeowner to sell, and with a continually falling price, who wants to buy?

Builders have built enough McMansions for the next 5-10 years, so the government bailout of these bad mortgages is going to be a Long Term Investment.

One of my proposals is to simply have all banks slash 10-30% off ALL first mortgages, both good AND bad. Banks participating can receive a portion of this difference from a bailout, if one is really needed.

These are some of my assumptions and possible outcomes:

1) The price of homes is still artificially high, due to the artificial demand created by the "mortgage-for-anyone " market that existed over the past 10-20 years or so;

2) It will act as a stimulus package without government money. Equity lines may open again for home improvement,...;

3) Those that are upside-down with their mortgage will now be able to sell their house with less loss, or possibly some profit and even buy another house, thus opening up the sell/buy real estate market, which is currently stalled.

4) With a greatly-reduced house-price drop, the housing prices can start at a new, lower level, encourage responsible buying, and the market will be allowed to operate again- finding the actual value of a house. Those that are on the sidelines, waiting for the prices to stop following would then actually make the purchase;

5) With the pending bailout and falling home prices, one of the issues has been, "What is this junk worth?" Banks do not really know how much liability they have on their books, which has been repeated in the media several times. Without an answer, we do not know how much the bailout will cost. If the housing market was functioning properly, prices for this junk could be more easily determined; and

6) Banks with "toxic mortgages" would be more able to take a measure of their real assets, which is unknown due to the falling house prices. This unknown is preventing inter-bank lending.

Instead of trying to save us with "Trickle Down Economics (or save the corporations first", let's try some "Grow Up Economics" and let the everyday person see some results, first-hand!