Wall Street Change offers simple, logical solutions to tough economic problems
that appear to have been caused by Wall Street Investment Fraud.

Wednesday, November 3, 2010

A 2010, after the election, 4 Point Economic Plan that requires no bailout!

Here is a four point plan to reverse the economic downturn in America.

1. Reduce the interest rate on deposits of the billionaires, while increasing the interest rates on savings for those with minimal savings.

In essence an interest rate savings reverse structure, those with less wealth get a higher rate of return on their deposits than those with more wealth. We are presently in an economic ponzie scheme in which the rich demand the greatest return on their dollar, and this puts immense pressure on the servicers of those funds to create unrealistic profit margins for their tycoon clients.

2. Create a consumer credit card debt reduction incentive plan that would also lower the interest rate on existing credit card debt to 1.9% for those who are actually paying down their overall credit card debt every month (this program should also apply to student loan debt).

To keep the 1.9% interest rate, consumers simply need to lower their overall debt each month to take advantage of the consumer debt low interest rate debt reduction incentive plan.
Example, consumer has 10,000 dollars in debt. Each month, the customer'ss monthly minimum payment would be 2.5% of the total due, however, the customer would get to "re spend" 40% of the amount that the principle was reduced by.
The result would be a steady decline in the overall credit card debt while allowing the consumer to continue to make necessary, frugal purchases each month.

3. Foreclosure Homeowner Rebate Checks to anybody being foreclosed upon on a homeowners primary residence. This Foreclosure rebate check would be calculated at 80% of the original down payment plus 80% of any accrued equity if a foreclosure occurs. 

The foreclosure rebate check can be applied towards staying in the existing home until most of the rebate money is used up, (the rest going towards moving expenses for the foreclosed homeowner). Or, the homeowner can choose to take the rebate check and walk away (the homeowner would still have the right to hire an attorney if they think they lost their home because of predatory loans or unfair policies).

4. An across the board home mortgage interest rate reduction to 3.5%, effective immediately, for everybody, no questions asked. For those homeowners who are a glutton for being put through the paperwork ringer, offer a 3.0% option for those willing to deal with all the paperwork filings and potential months of delays.

Notice that none of these four suggestions requires the government actually give out any subsidies. Instead, this four point plan reduces the interest rate debt load of main street, while putting the brakes on out of control profiteering by the ultra wealthy. 
The additional monthly increase in spendable income will generate more local economic activity, and that activity will be based on EARNED INCOME. This in turn will help stabilize local governments as they see their sales tax receipts begin to rise.

UPDATE - NOV. 19, 2010 - Bernie Sanders, congressperson from Vermont just identified the same problem to the economy as I have, the billionaires, 16 days after I originally wrote my 4 point economic plan down below. However, Sanders "solution" to tax them more is not what I advocate. I advocate giving the billionaires and trillionaires less interest payment payouts on their gargantuan savings.


Hotshot said...

This is mostly just wishful thinking. When you invest larger amounts, banks pay more interest as an incentive, and because it is less costly for them. But this is one more reason why the wealthiest people should be willing to pay a higher rate of income taxes, as they get to benefit from interest rates nobody else can take advantage of.

Alessandro Machi said...

It is not wishful thinking, it is actually a demand. It's all the other middle class and main street people who don't assert themselves that is the problem.

I don't want higher taxes, I want a better distribution of created prosperity. I just added a link to the Bernie Sanders article that concurs with my point about the billionaires, read it, and get mad.

Unknown said...

Every negative equity homeowner is legally entitled to a similiar financial benefit to remain a negative equity homeowner based on capitalism and the law, almost 3 million negative equity modifications were issued outside of HAMP's eligibility guidelines by the banks themselves setting the precedent.

I sent the entire proposal to the government showing how it would increase disposable income on Main Street by a minimum of 6 billion dollars each and every month without costing the taxpayer one cent.

If your interested in a copy, please email me at sue806@aol.com

Alessandro Machi said...

Susan, I wish I better understood your first sentence, as I feel like I am missing out on something interesting.

Kevin Mjaatvedt said...

Alessandro, I have to pick out a distinct point here. The problem with all of these suggestions is that you are interfering with markets. Think of it this way. Say banks get together and create this plan to pay the rich lower rates and the poor higher rates. Take a guess what happens. A new opportunity is out there for a bank to come in and undercut the competition. Either that, or the big money will find alternative forms of interest whether it be short term CD's which are not discriminatory. Also, it would be likely that new products would be developed that would enable people to earn the market rate (that is the rate that is deserved in the market, and by deserved I don't mean that rich deserve it more than the poor, just that that money is significantly more valuable). You cannot interfere with these interest rates, it would be essentially useless.

I enjoy the blog although most ideas are against my beliefs, its an interesting read. Check out mine as well http://the-random-talk.blogspot.com. Feel free to message me personally to talk more.


Alessandro Machi said...

Hi Kevin. I see what you are saying, however, incentive based programs can be introduced in times of crisis.

I wanted to keep this article short and to the point so I left out some very important reasoning as to why the billionaires should get less.

I'll have to write an article about why billionaires can "afford" to get less than the rest of us.

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