It's the Economy Stu... Percolate up

Friday's news included Wells Fargo bank offering to take over Wachovia bank. This offer was 'sweeter' than the previous Citi Bank offer. This is what happens when the government (that is We, the people), step in and promise to pay for all bad debt. I see this takeover offer as the first in a long line of mergers in which the profits go to the executives and share holders of the banks and the debt goes to the tax payer, me.

There is no apparent down side to taking on another bank's bad debt. H.R. 1424 puts the full faith and credit of the United States of America behind absolving the debt. A bank can assume, and then write off, the poorly performing loans keeping the profitable ones for themselves. As part owners in these banks We the people have some stake in those profits, but the 'bad' debt will most likely siphon off any gains. And on top of these undesirable conditions We the people will need to foreclose on the bad loans in order to obtain our best return on our investment. We the people will be forced to throw our neighbors out of their homes so we can gain at least some return. And the beneficiary of the sale of the foreclosed houses will be the 'rich' people who have the money to invest in real estate. This is a foundation of "Trickle Down" economics.

Advocate "Percolate Up" economics. Put the money in the hands of those who need it, by forgiving mortgagee obligations and let that additional cash, flow into the private sector in the form of new purchases of real and durable goods. The resulting surge of purchases will jump start the global economy. The money will quickly get from the bottom and percolate up to the wealthy. The purchasing power of the American consumer will swell the treasury when additional tax revenue from income and sales begins to flow, by this December.

Someone can always point out deficiencies in a theory. But we have tried 'Do nothing' and 'Trickle down'. Let's try 'Percolate up'. Give this theory a chance for 20 or so years and if it isn't working out we can adjust, just as we need to to day. But Albert Einstein said to do the same thing over and expect different results is a definition of insanity. I, We the people, are not insane.

Percolate up!

How to save the United States of America's economy

The answer to the current economic problem is to pay the mortgages of people up to $700,000,000,000 dollars. Rather than trickle down the money from the top percolate the money up from the bottom. This solution will solve the immediate problem of home owners loosing their homes, and put the much needed cash into the hands of the banks.

From what I have read of the proposed solution We the People will guarantee loans which are in great chances of default. By guaranteeing the loans the banks are free to loan additional money to new clients and the economy continues to operate. But the home-owner still cannot pay his/her mortgage and when the loan fails he/she and family become homeless. To make matters worse We the People are the bank owners and are responsible for evicting those former owners.

In my proposal We the People, (the government), gives the money to the [struggling] home owners by paying off our mortgage. That way the bank get the money, and is free to make additional loans. And now that the home owner is released from the burden of the monthly mortgage payment he/she is able to make purchases like cars, major appliances, home improvements. These purchased are an instant economic stimulus. Major money begins to flow through the system through the thousands of small businesses in local communities.

If the largest banks fail in this scenario, too bad. The executives should have thought of the consequences when they approved their business plans. The economy will be fine because the 'little' guy will be in a position to spend and that money will percolate up to the banks which had always done the right thing. This plan puts the people ahead of business and saves the family. Small business benefits and by extension all economic sectors see huge gains. This is the 'real' help the government, that is We the People, can provide to help each other out of this greedy mess.