Government bail out play by Sav Tropiano.
The government is willing to inject 700 B plus to purchase 'bad loans'.
Let's look at another option:
There are aprox: 50,000,00 single family homes in the US (these are homes owned and occupied by families not investment or otherwise). Let's take the $ 700,000,000,000 / 50,000,000 = 140,000 per house household.
What does that mean to each and every homeowner?
1. We could pay down our debt (free $$ for the banks to invest) and give us more purchasing power, as our mortgages would be lower.
2. We could use that money to invest in other ventures.
And who knows what else.
What would it mean to the government?
Government would get higher revenues in taxes as we spend more. The initial investment would be recuperated over the next 30 years as anyone who took the funds (assuming the house qualified for the max of 140,000) would pay back the money as interest free in higher income tax (say an extra 10% on your fed taxes) until the debt is paid, if you sell your house then the Fed would collect the difference owed at closing.
Let face it the economy would be on steroids. Our 11,000,000,000,000 debt would be reduced over the next 10 years and we would enjoy a healthy economy for many years to come.
Can anyone tell me what the con's are to this plan?