Summary
Reduce mortgage debt, put more money into tax payers pockets, kick start the economy, reduce mortgage debt AND increase affordability!
Analysis
So far, during this world credit crisis, billions of pounds, euros and dollars have been 'lent/given/funded' to financial institutions, mainly banking institutions, to 'save the economy'.
The funding of these astronomical bail outs is in the hands of the tax payer. Tax payers all over the world are going see increased taxes, sooner or later, to pay for the spending of today.
Why?
Because financial institutions undertook debt of more than a risky nature, charged the earth and when it all started to fall down around their ears, put their hands out for money from the state to pay for their ineptitude!
The tax payer, the man on the street, expected and still expects more from the financial institution and certainly more from the regulators who control these institutions. Inevitably the tax payer foots the bill!
So a simple, easy solution is required to help everyone!
Those too far into the mud will fail and fall at their own expense!
Instead of giving this money to the institutions, to possibly mismanage again and then ask for more, give it to the people!
Reduce EVERY mortgage on the primary residence by 50,000 (an example figure) across the board! Any mortgages less than this figure will be cleared, without penalty!
What will this do?
It will help balance the books of the banks by the reduction in its mortgage book so their customers have more disposable income, higher bank balances, more cash into the system and almost overnight kick starting the economy!
But my mortgage has been cleared off and I didn't get all the money?
Any mortgagees who's mortgage has been cleared would receive the difference over a time period in monthly installments issued by the benefits office. This could then be regarded as a limited period second income. This income would be taxed at the rate being paid before this additional income was being received. You cant increase the taxes due to an increased income from benefit?!
This would then put more money into the pockets of the man on the street, in effect, more spending power.
I am on benefit anyway and don't have a mortgage?
The benefit per 'registered' family unit would receive the same amount of money over the same time period. Making life easier for the people who really need the money. Benefit would NOT stop with these payments being made but in addition to these payments. Maybe only for a few years, but the lives of millions of people would be changed overnight, for the better, and if managed and controlled properly would become a spring board for a healthier nation as a whole.
This may seem very radical and irresponsible but how many people all over the world would benefit?
Millions!
Taxes would still be being paid.
Mortgage debt would have been reduced.
Cash would be released back into the economy.
A better standard of living for the man on the street.
Affect the incomes of small business, large business and the state as a whole!
The only downside is in the hands of the institutions NOT receiving billions for their own further mismanagement.
The governments would not 'own' high percentages of institutions, effectively privatizing the institution.
The rich would not receive a proportionate benefit.
If this is not a win win situation I don't know what is?
Hindsight is a wonderful thing but GREED is always at the forefront of the financial mind!
