Yes We Can

Yes we can - in five minutes or less - Here is a possible idea/solution to the current economic crisis. In addition to the government (we the people) bailing out the corporations as investors, there needs to be a second phase of economic growth that will be necessary to re-establish confidence in the stock market and to allow for new growth. How about this - why don't we fund a new corporation or utilize companies like Fannie Mae and Freddie Mac (if their charter allows it) to take over some/most/all of the debt that is causing the current economic meltdown of our economy. Instead of bogging down the financial markets with this bad debt for years, slowing their return to solvency and our country’s return to prominence, why not separate the bad debt from the good debt? Why continue to let the entire collective of people, businesses and investors suffer for the mistakes of the few and the greed of the corporations. Think about this; when you have a basket of apples and you realize that some are bad, the first thing that you do is to separate the good apples from the bad apples - correct. So, why not utilize the same logic with this economic catastrophe. In doing so, the financial institutions will be able to drastically reduce their bad debt-service and almost instantly have a more profitable balance sheet and be able to provide the necessary financial assistance to those that have earned that right. This will also enable them to rebuild the consumer confidence with their new/more positive valuations on the stock market. With this in place, Wall Street should respond very positively. Since the government (we the people) will now be backing the corporation that will be servicing the bad debt loans -i.e. the foreclosure loans, the money for this financing will be inexpensive and current bad debt interest rate could be lowered to an affordable fixed rate program, with a longer repayment time period. I am sure that everyone (businesses and general public) that is in financial trouble would prefer and appreciate more affordable payments in contrast to foreclosures and repossessions. By doing what is suggested in this plan, we have also solved for a much debated variable; consumer/bad debt accountability. It is best for everyone involved to be accountable for their actions. Now back to those apples – when I was a young child, I not only watched my mother separate the good apples from the bad apples, but she also salvaged as many of the bad apples that she could. She would cut away the part that was bad from the good and throw the bad part away. What she did next was the most amazing part of this story. She would eat some of the remaining good parts from the bad apple to show me that it was safe to eat. This is what the government needs to do to rebuild confidence in the market and with the people. We (the government) need to allow for the separation of the good from the bad. Leaving this extensive bad debt in with the good debt will only slow our economic recovery. Now, let us use this as a learning experience and not make the same mistake again. We as a country know what not to do in the future but at the same time, we must allow for our society to grow. I know that everyone cannot be helped, but this is a way to help most of those who want to be helped. The profit, from the debt that we salvage and service throughout the years, will far outweigh the losses. Now in keeping within our capitalistic approach to life, there will be a huge profit that is derived from this adjustment of our current business paradigms. The profit made, from the interest rate differential along with the supplemental programs that will be offered, will be infinite and can be placed towards salvaging our Social Security Program. This ensures that, sooner or later, everyone benefits and this program. As the financial benefactor, Social Security is probably least likely to have much public resistance. Shortly after this plan is implemented, it should infuse a high positive level of energy and confidence into the market. It will also create an increase in the rate of home retention and home ownership. I feel confident that the country will experience an avalanche of business growth due to a domino effect, stimulating the job market for years to come. By the way, this enhanced home ownership plan would be a great supplement to our social security benefits, our pensions, etc., not forgetting the pride of ownership and its’ benefits for everyone and the community that was experienced along the way towards retirement. If the new company is structured properly, I am sure that, one day, it can also be traded on the Stock Market. Since our Social Security Program will be the main benefactor of the company, the profit made from these shares will be “icing on the cake” to the profit already being dumped into the Social Security program. Just imagine if the proceeds of GOOGLE stock or Fannie Mae/Freddie Mac stock (when it was good) was dumped into our Social Security System, wouldn’t that have been really nice. The reality of our current plight is that sooner or later, this problem is going to be fixed and the market will be great again. This is the time that the right decisions have to be made to benefit everyone involved, not just companies like A.I.G. Like the old saying goes, if you want the same result that you currently have, keep doing the same thing. If you want a different result, try something new. I am quite sure that with all the intelligent minds involved in the current decisions to save our future, this idea can be modified and enhanced to bring about the change that we need to salvage our country. To read more of this “Yes We Can” plan, just visit www.mainstreetgandhi.com.