Alex Jones was talking yesterday about the cost of all the mortgages in the United States and the total cost of the bailouts. Unfortunately the audio clip I was listening to messed up when he started talking about it, so I did a bit of searching and found this information – I’m royally ticked!
Cost of Mortgages: Total Sub-prime mortgages comprise $700 billion, which is only 7% of all mortgages in the United States, which total $10 trillion
Cost of Bailouts: The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s. I think there is more involved in this figure so it might be higher, but couldn’t find more credible evidence of that.
The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation… Per Bloomberg
It would have ben much, much cheaper and far more effective help to the economy to have the government pay down the principal of upside-down mortgages to current value of the house, force the banks to refinance all those loans to a fixed rate of interest, and put something similar to a lien on the house (equal to the cost of paying down the principal) and allow the lien to travel with the house when selling it until it is completely repaid – like the habitat for humanity houses have on them (yes this system ALREADY EXISTS). When the house sells, any proceeds from the sale of the house are split – 50% towards the government lien and 50% to the seller of the house, and the lien travels with the house until the lien is completely paid off.
This plan would have been only a fraction of the cost of the bailouts and would have had immediate and direct effect on the economy and foreclosure issue. I emailed the white house with this idea in January, but obviously nobody read it. The mortgage industry would have stabilized instantly, the homebuilding industry would still be strong, far less foreclosures, people would continue purchasing like they always have but much more carefully (because of the valuable lesson we have all learned here not to pull all of the equity out of your homes). And best of all – the house would repay itself over time guaranteed – rather than the taxpayers paying Wall Street. The investors would have received their money through the houses like it should have been to begin with.
And in walks the cash for clunkers program – another program that truly helps the PEOPLE and truly has a direct immediate effect on the ECONOMY – and they are talking of shutting it down? Hmm lets see how that worked out – $22 billion to GM for their bailout – whereas the (now) $3 billion given to the PEOPLE under the Cash for Clunkers program actually helps the ECONOMY in so many, many different ways. Of course this program may not provide for repayment to the government but it is far more effective than just giving GM money and becoming ‘Government Motors’.
WTH is going on with the people running the show? It is obvious to me there is absolutely NO INTENT to improve the economy or help the people in the United States. I’m absolutely disgusted. There are brilliant educated people supposed to be providing information to the people making decisions. Why has that information system broken down? Or has it really come to a point where they don’t care who knows what their agenda really is?