The Right Way to Do a Bailout

Rather than give 700 billion to bailout bad loans, why don’t we put that money into the system by allowing homeowners to submit a form to the feds showing their name, the name of their lender and the amount owed on their non-defaulted home loan.  The feds would then issue a two party check (homeowner and lender) for each homeowner’s pro rata share of the 700 billion.  This gives added liquidity to those institutions that did it right (lender), rewards those who have not defaulted (homeowner) PLUS the reduction the mortgage will allow the homeowner to buy something and stimulate the economy.  I can’t image any homeowner voting against a Congressman or Senator who approved this package.  It gets the needed liquidity into the market but does so by rewarding those who took out and made prudent loans not by “bailing” out those who caused the problem!

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