{"article":{"id":220596,"heading":"The Bailout is a Crime. Demand Socialized Housing!","author":"gimme shelter","created":"2008-09-24 04:34:03","modified":"2008-11-24 11:16:11","last_modified":"Mon, 24 Nov 2008 18:16:11","article":"
As we watch the housing market bring down capitalism, we are witnessing a huge robbery upon us, in the form of this $700 billion bailout that Henry Paulson is requesting. He wants all that money, no strings attached.
That money could pay for a decaded of health care for all Americans!
Paulson, a crony of bankers must be regulated and controlled before he tries to steal again. Write to your congressperson and senator., to let them know that you know what's up.
With that $700 billion, we're going to be purchasing bad debt. How about we start tracing this bad debt back to the houses and the people living in them? After all, we will own the mortgages, so, we'll also own the houses.
Take each house, and when the owner defaults, do the following:
1. Let them stay in the house, so they don't become homeless or enter the rental market.
2. Rent them the house at market rate. sell them an option to buy the house later. For example, let them rent at $2,000 a month, and $200 extra for the option to buy.
3. Take this house and hire a management company to run it - this will be jobs for out-of-work people. Take the house and have the government purchase a mortgage from a capitalist against a portion of the house - this will raise cash. Sell the mortgage holder an option to buy, at a lower price (say $80 a month).
4. When the market rebounds, say in 10 years, as the price rises to a certain predetermined level, the government will give the tenant an opportunity to exercise the option to buy. There will be a window when they can buy, and when the window closes, the second option that the mortgage owner has can be exercises. If they opt not to buy, the house will be put on the market.
5. Once sold, the revenues from the house will be used to pay off the mortgage, or the purchaser can take over the mortgage. There will be a possible loss at this time, and the taxpayers will foot that bill.
This scheme will temporarily socialize housing for all the people upside-down in mortgages and living in apartment buildings that were purchased with bad paper. It will also allow the government to build the long-term capacity to operate socialized housing for the people. This will tend to depress the speculative real-estate market.
\n","contact":"","link":"","address":"","phone":"","parent_id":0,"mime_type":"text\/plain","summary":"If we're going to buy the debt, we want the collateral.","numcomment":13,"fileurl":"\/uploads\/","filesize":null,"article_url":"\/news\/2008\/09\/220596.php"},"attachments":[],"comments":[{"id":220598,"heading":"lets not support that crime either","article":"I am not so keen on bailing out ANY of my fellow Americans. How is bailing out a citizen in Texas working an oil field any differant than bailing out a citzen in New York woring on Wall Street? How is it my duty to work and sweat so others get what they want? That is servitud, slavery, reguardless of WHICH apointed master gets my earnings (EARNINGS! a very word very important to me since I can't afford investing in either Wall Street or my own home).\r\n\r\nIf you say that one is a "CRIME", why can you not even see that the other is a CRIME as well?\r\n\r\nIf you want to dig into your own pockets to support Wall Street investors, then you can do so without reaching into MY pockets as well. And if you want to support other citizens housing situation, then you can do so without forcing your fellow Americans into servitude by picking OUR pockets.\r\n\r\nAmericans who would use govenrment to make me pay their bills are assholes and do not deserve ANY of MY EARNINGS.","author":"PrionPartyy","parent_id":220596,"mime_type":"text\/plain","created":"2008-09-24 12:16:07","modified":"2008-09-24 12:16:07","fileurl":""},{"id":220599,"heading":"what is the alternative\/","article":"Let's say we "punish" the people who took the mortgages. We toss them out of the house.\r\n\r\nNow "we" would have to sell the house into a sinking market, further depressing the market.\r\n\r\nIf credit were fluid, there'd be buyers, but credit will not be available. Maybe some rich folks could buy up the house.\r\n\r\nSo then, the rich folks turn around and rent the house out to someone until the recession\/depression ends. At that time, they will sell the asset after the rent collected + selling price > price paid + adjustment for inflation.\r\n\r\nWhy not let the "rich folks" be "the people"? That's all this plan does - additionally it uses capital from investors to replenish the account so the plan can be carried out longer.\r\n\r\nThe occupants of the house will have to pay rent, which is rising to around half the monthly payment on the mortgage (and property prices are dropping to match rent). While the resident pays rent (and fixes their credit) they do not gain equity -- "the people" have the equity and recover the cost slowly.","author":"gimme shelter","parent_id":220596,"mime_type":"text\/plain","created":"2008-09-24 13:18:34","modified":"2008-09-24 13:18:34","fileurl":""},{"id":220602,"heading":"punish?","article":""punish"? \r\n\r\nNot forcing others to pay someone else's bills is to "punish". \r\n\r\nWhat u b smoking?\r\n\r\nThe rest you wrote about is probably accurate. But then again, it isn't my duty to be paying the bills of assholes who would use government to democraticly enslave me. I don't care if such evil and offensive people loose everything. And if the over priced cost of houses falls enough, maybe someone like me could one day afford a HOME for myself. Keeping the cost of a HOME artificialy high by subsidizing the assholes who would enslave me sure as hell isn't helping me. Why should I care about the assholes who would prevent me from buying a house by keeping the prices out of reach?","author":"PrionPartyy","parent_id":220596,"mime_type":"text\/plain","created":"2008-09-24 15:33:42","modified":"2008-09-24 15:33:42","fileurl":""},{"id":220652,"heading":"This wouldn't stop the price decline","article":"This is hardly a bailout of borrowers. It just delays their entry into the rental market, so rents don't escalate more. It produces income for the owner\/lender, who are "us". It benefits the suckers who bought in the bubble, who are "us". (FYI, I didn't buy a house. I rent. I put money into the bank and retirement.)\r\n\r\nThe residents will lose all their equity anyway. This isn't a favor to them - it's pragmatic.\r\n\r\nThe prices of houses will continue to drop because credit is tight and demand is correspondingly low. They were inflated, by the bubble, beyond the means of most people.\r\n\r\nThe last housing crash, in the early 1990s, took around five years, and at the bottom, the cost of houses was less than the cost of building a house on the property. We may see similar conditions again.\r\n\r\nThe last bad mortgages were written in 2006. These ARMs will reset in 2011, and the last of the borrowers will default at that time. (Many will default sooner, because they'll be out of work, or with the collapse of the market renting will make more sense than owning - and default accordingly if the lenders refuse to renegotiate the loan.)\r\n\r\nSo, don't worry about finding a good deal. There's still time.\r\n\r\nLet's get Ed McMahon's mansion, and turn it into Public Housing!","author":"gimme shelter","parent_id":220596,"mime_type":"text\/plain","created":"2008-09-26 14:27:49","modified":"2008-09-26 14:27:49","fileurl":""},{"id":220655,"heading":"wrong","article":"wrong, the fictive derivative capital monster of two thousand trillion in banking paper is the reason for the collapse of this burning house of cards.\r\nThe housing market correction is 'only' about two hundred billion.\r\nLet's blame the victims again.","author":""housing market bring down capitalism&qu","parent_id":220596,"mime_type":"text\/plain","created":"2008-09-26 14:57:28","modified":"2008-09-26 14:57:28","fileurl":""},{"id":220665,"heading":"a crime, revisited","article":"Well, as long as you don't actualy disagree with me, and instead just add more talking points of why you think \/ feel you have a calling to enslave me for your own benifit, well, then I guess my job here is done. ","author":"PrionPartyy","parent_id":220596,"mime_type":"text\/plain","created":"2008-09-26 23:25:35","modified":"2008-09-26 23:25:35","fileurl":""},{"id":220666,"heading":"being precise is...","article":"being precise is important.\r\nThe banking houses are the criminals, the 'marks' aka the morgage holders as in the duped prey, are not responsible for this crisis in capitalism.\r\nJust pointing that out to counter the misconception of who is the criminal and who is the victim.\r\n\r\n","author":"not a problem","parent_id":220596,"mime_type":"text\/plain","created":"2008-09-26 23:38:55","modified":"2008-09-26 23:38:55","fileurl":""},{"id":220695,"heading":"reality","article":"As it turns out, BOTH are the victims. And the criminals are those who would use government power to force US to bail out either.\r\n\r\nLoosing cash or houses is not the crime, using goverment to empty my pockets to bail out either is the crime.","author":"PrionPartyy","parent_id":220596,"mime_type":"text\/plain","created":"2008-09-27 18:49:34","modified":"2008-09-27 18:49:34","fileurl":""},{"id":220703,"heading":"Collapse of Whatever","article":"This isn't the collapse of capitalism, but it is the collapse of the derivatives.\r\n\r\nThe bailout shouldn't be used to prop up this part of the economy, but to shield other parts of the economy from that collapse. The parts that need shielding are things like basic housing -- we don't want rents to rise (and the sales price of apartments to rise) because many new renters enter the market.\r\n\r\nAnother part that need shielding are retirement funds. People will lose part of their retirement. Something must be done to limit the damage, especially for people with less money saved up.\r\n\r\nThis collapse can be used to take things out of the private sphere, and into the public sphere. It would require that we demand that the bailout be for the people, not speculators. The most politically feasible way to do this is to use the money to purchase assets from the private sphere when they've lost market value.","author":"gimme shelter","parent_id":220596,"mime_type":"text\/plain","created":"2008-09-28 13:49:25","modified":"2008-09-28 13:49:25","fileurl":""},{"id":220713,"heading":"Baffling","article":"It's an allusion to a Rolling Stones song.\r\n\r\nOoh, see the fire is sweepin\r\nOur very street today\r\nBurns like a red coal carpet\r\nMad bull lost its way\r\n\r\nAnyway, my suggestion is just that if we're going to buy assets, we should buy and hold, for the benefit of regular people, not buy and resell. That's all. (I'm capitulating to the washington consensus, and trying to propagandize to promote this idea.)\r\n\r\nObviously, this bailout is corrupt. But it's going to pass, and not primarily because of the corruption. The foreign investors need to be sated, or they won't lend more money to our country, which is deep in debt. This would be yet another liquidity crisis.\r\n\r\nThe problem is these derivatives -- it's difficult to assess their risk. They're hard to understand, to start with. Then, they give people the sense that they've hedged against a catastrophe... when in fact they may be more vulnerable.","author":"gimme shelter","parent_id":220596,"mime_type":"text\/plain","created":"2008-09-29 08:53:19","modified":"2008-09-29 08:53:19","fileurl":""},{"id":222483,"heading":"Dean Baker argues for something similar","article":"[Dean Baker is a well known progressive economist. He even cites support from bankers.]\r\n\r\nForeclosures With the Right to Rent:\r\n\r\nby: Dean Baker,\r\nt r u t h o u t: November 17, 2008\r\n\r\nPoliticians often prefer complex solutions to simple problems. Nowhere is\r\nthis more apparent than with the long list of complicated and convoluted\r\nproposals to address the country's foreclosure crisis.\r\n\r\nMillions of people face the loss of their homes over the next few years.\r\nWhile the politicians in Congress have developed a wide variety of complex\r\nschemes in order to hold back this flood of foreclosures, including one\r\npassed into law last summer that provided up to $300 billion guarantees for\r\nnew mortgages on homes facing foreclosure, none have had much impact thus\r\nfar.\r\n\r\nThe unavoidable problem with these schemes is that it is difficult to\r\ndesign a plan that aids families facing foreclosure without giving an\r\nincentive to other homeowners to also default on their mortgage. In\r\naddition, it is hard to justify taxing the people who are struggling to keep\r\nup with their own mortgages in order to help those who default. It is even\r\nharder to justify taxing ordinary people to help out the bank executives,\r\nwho issued hundreds of billions of dollars of bad loans.\r\n\r\nAs a result, to date these programs have not prevented a tidal wave of\r\nforeclosures and evictions. The number of foreclosure filings (there are\r\ntypically two or more filing for every actual foreclosure) is now\r\napproaching 300,000 per month.\r\n\r\nFor those not offended by simplicity, there is an easy solution.\r\nCongress can temporarily modify the rules on foreclosure to give families\r\nfacing foreclosure the right to rent their homes at the market rate for a\r\nsubstantial period of time. Rep. Raul Grijalva proposed such a change in the\r\nSaving Family Homes Act, which would allow homeowners the option to remain\r\nas renters for up to 20 years following a foreclosure.\r\n\r\nThis bill would immediately give families security in their home, so\r\nthat if they like the home, the neighborhood, the school for their kids,\r\nthey would have the option to stay in the house for a substantial period of\r\ntime. This also has the great benefit for the neighborhood that homes will\r\nremain occupied.\r\n\r\nPerhaps more importantly, this change in foreclosure rules will give\r\nbanks a real incentive to negotiate conditions under which homeowners can\r\nstay in their homes as owners. Banks do not want to become landlords. The\r\nbank will own the house after a foreclosure, but a house with a renter is\r\nworth much less to them than a house over which it has complete control.\r\n\r\nGiving the homeowner the right to stay as a renter hugely increases\r\ntheir bargaining power with the bank. The result of this change in\r\nforeclosure rules is that far more homeowners are likely to remain in their\r\nhomes as owners.\r\n\r\nThe beauty of this sort of proposal is that it is simple, can take\r\neffect immediately, it requires no taxpayer dollars and no new bureaucracy.\r\nIt also is not giving anyone a big bonanza. Homeowners are not likely to\r\nline up for a process that could end up with them being renters. And the\r\nbanks will obviously not be thrilled about a rule change that will leave\r\nthem worse off in trying to squeeze money out of homeowners.\r\n\r\nWhile the basic point of the right to rent is simple, it can be extended\r\nin various ways to further aid homeowners. Bernard Wasow, at the Century\r\nFoundation, has proposed some additional measures to facilitate the\r\ntransition to rental status or possibly a return to ownership. Daniel\r\nAlpert, of Westwood Capital, has a somewhat different version that creates a\r\nmechanism for homeowners to buy back their homes after five years.\r\n\r\nIn short, if people want to add bells and whistles, it is easy to do so.\r\nBut, the key to stopping people from being thrown out of their homes is\r\nsimply to change the law that allows people to be thrown out of their homes.\r\nThat one is so simple that even a policy wonk should be able to understand\r\nit.","author":"gimme shelter","parent_id":220596,"mime_type":"text\/plain","created":"2008-11-24 11:16:11","modified":"2008-11-24 11:16:11","fileurl":""}]}