The Economy's Future and a New Car.

Greetings again!

It seems we are adrift in a sea of bad economic news these days. The Dow is now a better roller-coaster than the Steel Phantom of mid-90's Pittsburgh, PA fame. It seems like everyone has ceased to trust their bank and the media is reporting on every little slip-up and problem in the financial community. Money isn't around and people need to tighten up their belts.

Or so they want you to believe. I applied for a car loan this weekend and got the lowest rate I've ever gotten on my own (except for dealer incentives and the like). I traded our Honda Accord for a Ford Expedition to pull double-duty as my wife's vehicle and our new tow/camping vehicle.

In short, I'm not worried about the economy.

The media would have you believe that the bailout was all said and done until McCain showed up last week. The actual truth was that Harry Reid announced it's failure and blamed McCain before McCain even got to Washington. Think about that.

There is a very simple solution to this problem, one that could involve LOTS of revenue for the government in the next 10-20 years. And it would still bail out the mortgage industry for the time being:

1. Complete the buyout of our major financial institutions. Do NOT give the treasury a blank check. The terms of this buyout need to be very specific.
2. Eliminate all Adjustable Rate Mortgages. ARM's got us into this, because people have proven that most cannot be trusted with money.
3. Everyone living in these homes that have been foreclosed (that caused this mess to begin with) will not have to leave their homes. If they choose, they will become renters, because that's what they should have been to begin with. In the coming years, if they begin to earn more money, they can purchase a home they can afford. However, no government benevolence here; if you're late on your rent, you will be evicted. Income begins to flow in on this plan to offset the initial cost.
4. In a couple years, after the market has become entirely stable following this debacle, begin to slowly reintroduce these houses to the market at auction. Citizens will be able to buy their first home, or homeowners will be able to purchase 2 or 3 homes with renters already occupying them for 75-80% (I predict) of their fair market value. The government gains a significant amount of money (perhaps along the order of $1-1.5 trillion).
5. In the meantime, eliminate Capital Gains tax and Corporate taxes to boost investment and lower production costs. When people know they're not going to pay taxes on investments, trust me, they will FIND money to invest.

Of course, if you tell Congress this plan could make a lot of money for the government, they will eagerly seize the opportunity to go ahead and spend the "potential profit" now, then neglect to ever enact the plan to its fullest potential later. We'll end up with expensive government housing that will become decrepit and our deficit will quadruple.

Yeah, that sounds more normal...
-Craig