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You can seek and receive occasional "subprime" medical care in hospital emergency rooms. But the days of serious attention to an ongoing condition, arthritis for example, are over for you.
You can watch your life melt away and your family suffer, all without the prospect of any real assistance. Homeless shelters are full in most places. Public health programs have been overflowing for years. The "welfare state" simply doesn't exist. You're screwed.
Wall Street welfare was supposed to save us from all of this according to the Bush-Cheney scam artists. Those two and their henchmen doubled the national debt in just a few short years of concentrated looting. Somehow, the most recent Wall Street donations were supposed to secure failed financial institutions and generate a stimulus for the economy. No deal.
To add insult to that injury, a $140 billion tax cut for banks was written "into law" by a Treasury Department bureaucrat, a move that everyone consulted said was clearly illegal. Nothing was done about it. In fact, a key congressional staffer explained it this way: "We're all nervous about saying that this was illegal because of our fears about the marketplace," Nov. 10, 2008
Crime pays. Deception pays.
But the money to pay working people isn't there thanks to the financial manipulations that made the very wealthy even wealthier and left the rest with little to nothing in return. There is no room at this inn for people who need a helping hand.
When do the People Collect?
California passed a law that cut into foreclosures by requiring that the banks actually give a reasonable notice of default prior to tossing families onto the street. This program had an impact for a few months but foreclosures bounced back and kept growing. .
Representative Marcy Kaptur, (D-OH), responded to the economic collapse of Toledo, Ohio (11% unemployment) with a sensible idea. Foreclosures and evictions are a commonplace event. Kaptur tells citizens to stay put, don't leave your home if a foreclosure notice is issued. "Produce the Paper" is the theme. Due to the complexity of many bad loans, it can be very difficult to figure out which bank actually holds the mortgage or to even find a true loan document. Without that information, there are legal challenges that can force banks to delay or forgo eviction.
Time for a Nationwide "Cramdown"
The easiest solution, the most immediate, is a cramdown. What's that?
In bankruptcy court, a judge can take the total amount of a mortgage and divide it into two parts. The appraised home value becomes the "secured claim" and "the amount over the current appraised home value" becomes the "unsecured claim." The unsecured amount is discarded. The secured amount, i.e., current appraised value, becomes the homeowner's only debt. This debt can be amortized over the life of the loan. Thus monthly payments go down, people have a much better chance of staying in their homes, and they have some flexibility to pay their other bills. Link
Congressional Democrats and President Obama are arguing over legislation that would give bankruptcy judges greater options for "cramdowns." Both sides of the argument are out of touch with the accelerating harsh realities of the U.S. economy as experienced directly by the citizens.
There's no court that needs to hear this case. The nationwide cramdown should be negotiated directly by the Obama administration, on behalf of all citizens and the remaining banks. Obama's two financial system insiders, Treasury Secretary Timothy Geithner and chief economic advisor Larry Summers, would all of sudden become the good cop - bad cop negotiators shoving the banks in a corner and forcing them to submit to the plan.
Cramdowns were mentioned in the campaign as one of several options to address the needs of homeowners. Obama can resist the idea and those in Congress can ignore the scope of action needed. But the people will bring them back to reality very soon, just as they did on the specific issue of having someone in the cabinet so rich and aloof that he forgets to pay $126,000 in income taxes.
Meeting the urgent need for people to have a home means less social and economic disruption. There would be an immediate stimulus with more money available to spend in the real economy. This stimulus program would put money back in the economy in months not years.
