Economic crisis points out need for more democracy
Our federal legislators and the folks in the executive branch seem to mostly agree that bailing out Wall Street is required to save our economy. A handful of them are opposed, but for some reason, we are not hearing about any alternate proposals that will actually benefit the American people directly, including especially those homeowners who were swindled into predatory mortgages. Yet, from reports I have heard, very significant portions of the population are objecting to the proposal(s) currently on the table. Maybe if we had a system that would let everyday Americans get in on the discussion, we could come up with a better plan. I have a couple of ideas, but I am certainly open to others.
If we are going to throw $700 Billion at this thing, it seems to me that there would be a much better way to do it. Of course, the way that I believe would be best in the long-run would not fly at all with many Americans, or with any of our corporate-capitalist politicians because it would involve ending our sanctification of capitalism. Nationalizing the banking industry and restructuring banking as a non-profit enterprise would benefit a lot more Americans than just those who are feeling pinched by the current crisis. Of course, the only legitimate way to do that would be to include a citizens oversight board that would be superior to, and have at their disposal, both of the congressional oversight committees.
Another option that would be a more direct and short-term solution to this particular problem would be to guarantee all mortgages. If a homeowner fails to make a mortgage payment, there is no foreclosure, no default, the government would make the payment, and the homeowner would then owe the government that amount, collectible at tax time. I know the IRS already has some trouble collecting all of its debts, but at the very least, it seems like it would stabilize the market, prevent social disruption, and create a system that would transform us into a nation of homeowners rather than a divided nation of owners and renters. Yes, if you are in the rental business, you might have to find some real work, but it would be a drastic improvement of our society.
I do not pretend to be a master of economics. If this idea has flaws, and I’m sure it does, feel free to share them in comments, but try to stick to lingo that non-economists can understand. And of course, if you have a suggestion for a wholly different idea that you believe is better, please make your case.