Tuesday, February 10, 2009

Let's Solve This Now

The purpose of the Stimulous Package is to stimulate the economy right? And how does that happen? You can't create jobs unless people are spending money. People that spend money create jobs because they create a demand for goods and services. But no one has any money because they are either freaked out that we're in a depression and they are hoarding their money or they have lost their job and are freaked out because they have no money. It seems like a vicous cycle doesn't it?

My first proposal is this - Give all the good, tax paying Americans with good credit ratings a 30 year fixed mortgage at 4% through Fannie Mae or Freddie Mac. This will jump start the entire process and here's why:
It will create jobs by stimulating demand for appraisers, title companies, and other paper pushers.
  1. It will create a larger tax base because people will be allowed to take cash out if they have x percentage of equity in their homes.
  2. It will give those people hoarding all their money some extra cash every month due to the interest savings to go by those things they want, not just need, like flat screen TVs, cars, boats, restaurants, movies, etc, this creates jobs.
  3. It will create jobs because some percentage of those homeowners who take chunks out will be remodelling, painting, upgrading, or expanding.
The government finances the whole thing and makes money while stimulating the economy and NOT penalizing those of us who didn't go for some flash in the pan mortgage we knew we couldn't afford when the rate adjusted.

More ideas tomorrow. Why can't those people in Washington get off their ass and move it. In the words of the Madagascar crew - You've got to move it, move it!

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