The feds have a huge problem with buying toxic mortgage assets because no decision maker wants to admit that they have no value. If derivatives were 'marked to market', investors could lose big time, and politicians Paulson, Bernanke and Geithner certainly don't want to inconvenience the wealthy. Better to stick taxpayers with a fairy tale and let us restore those fortunes.
In return for our unwilling largesse, the least bankers can do is 'mark to market' personal mortgages so homeowners are paying on actual value instead of the false prices created by the policies of the banking system. The banks have it coming. Couldn't happen to nicer people. Besides, what else are they using their bailout billions for?
The most recent 'stimulus' theory, that banks should reconfigure mortgages to 31% of a person's income with the Treasury subsidizing the difference up to 38% of income, is crazy. We don't need to provide additional taxpayer dollars to hedge funds. Banks should lower mortgage payments to 31% of income because we've already given them boatloads of loot! Like all the other bits of insanity drifting out of the fog in Washington, D.C., this one is on track to become the latest citizen-financed boondoggle.
Fourth, health care must be provided to the increasing numbers of uninsured by federally funding Medicaid and taking the burden off the fiscally drowning states. While we're at it, we must also rethink Medicare. To control costs we'll have to give up the outdated, corrosive and costly third party payer system as well as the flagrant violation of common sense that prevents the government from negotiating drug prices.
Fifth, forget the stop-gap teensy tax cut drivel and permanently eliminate the payroll tax on everyone making less than $75,000 a year as well as on the vulnerable small businesses that provide so many jobs. That will put another 7.65% of personal earnings into the economy and give businesses another 7.65% of payroll to use as needed.
Now that's a stimulus!
The payroll tax is unconscionably regressive, hitting hardest those making the least. It should be replaced with a tax on all earnings above the $75,000 threshold, not just wages, and it should not be capped. That should guarantee the future of Social Security and eliminated one endless, tiresome conversation from the national discourse. Instead, maybe we can begin to discuss the cost of keeping military bases in 100 countries. Or we can talk about how to elect a responsive government.
Contributing their share to the Social Security system seems like the least the wealthy can do given the massive financial rewards they've received from the political and economic stability our tax dollars buy them. Not to mention the tax dollars that are now restoring their fortunes. I'm sure they'll be happy to do their part.
That's my plan.
In the meantime, I've cancelled my Citibank credit card.
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