The value of your house is meaningless for most people. Since everyone needs a place to live it isn’t as though you can sell it and retire. A home is neither a savings or retirement account and nobody should ever have thought of them as such. They are products that provide shelter. If you borrowed against it while the value was at it’s peak and can make the payments consider yourself lucky. You got a loan you shouldn’t have been able to get.

As for the STET I can’t give you a good answer. My biggest issue with taxes is that they should be transparent and be as close to user fees as they can be. It is interesting though and it has made me curious enough to look in to it further.

People not paying their mortgages back will cause foreclosures, which will cause a further bear market in the housing industry. I don’t like that it will have to happen. And I hate the thought of a 5-year old kid having to move because her parents made a bad decision.

But if the banking system freezes, jobs will be lost and growth will stop. That will cause a major recession. A major recession, with the loss of jobs, has much more widespread implications than the housing bear market.

This money needs to unfreeze lending and get banking working again. If that can be done at the micro level, I’ll sign up for it in a heartbeat. But I think much of this money needs to go directly into America’s financial and banking system.

This is not a Republican or Democrat talking point. This is my personal belief as someone who has spent a couple decades seeing first hand how banking impacts small and large businesses (i.e. “jobs”)

What are your thoughts on the STET? I would have thought that would not appeal to you, but you mention it not. Thanks.

There is a significant problem with your plan. If you bail out needy home owners, beyond those who were truly defrauded, the people that are paying as significant amount of the cost are those people you have not yet purchased homes. Bailing out people who spent money they didn’t have to buy a home they couldn’t afford will keep the price of homes artificially high. That in turn will hurt those who were smart enough to not buy during a bubble or have not yet reached the age or financial means to buy. It is simply picking the winners and losers based on when somebody purchased a house, favoring those who made risky choices. If we shouldn’t do that for people working in the financial industry we shouldn’t do it for home owners.

The price of housing has to come back down to reality. Otherwise the danger continues to exist. That in itself would help make housing more affordable.

After weeding out those that don’t pass that test, we should be left with just those few loans that won’t require nearly 700B to save. We can take it slow, (especially if there is a moratorium on foreclosures), take our time, and be sure that those we assist are deserving. That should mollify the bootstrap crowd. We can also design that help so it is paid back. Perhaps make it an interest free loan? This bailout of the actual folks who are in trouble, addresses the actual and initial problem we face(d), which is the burst bubble in the housing market and its effect on Wallstreet that trickles down to Mainstreet.

This gets money flowing again to the banks and stops the death spiral and tightening of credit everyone is screaming about needing to do something about now, now, NOW! (That “now” that scare most of the folks who want it so badly is the “before the election” now.)

The other half of the equation is to go back to some form of securities transaction excise tax. The US has used STETs before. Other countries use them now. This is the “Wallstreet bails itself out” thing we are hearing whispered. It should be shouted! The folks who come out against it are going to be the status quo crowd who since 1966 have been allowed to speculate in markets rather than invest in them. If you were happily making lots of money and there was less risk, would you want to suddenly find the game had changed and you now had to find other ways to make that money? I’m borrowing here from, gasp, Thom Hartmann. http://www.commondreams.org/view/2008/09/26

Again, we should completely scrap the legislation in it’s current form. We need a simple two prong approach:

1.) Get money flowing to banks by helping homeowners make their mortgage payments asap.

2.) Help Wallstreet flush the toxic derivatives from its own system by taxing all securities transactions, the good and the bad.

Another entire thread could be based on what to do with that STET revenue after Wallstreet is able to sit up and take nourishment again… The possibilities are endless but sadly, anathema to the status quo crowd. Expect major roadblocks from them.

From the congressional office:

(Washington, D.C.) – Today, Congressman Tim Walz voted against the revised Wall Street bailout plan released yesterday by Congressional leadership. Walz made the following remarks about the proposed bailout:

“Speaker Pelosi and the Democratic negotiators deserve credit for the progress they made on this bill. This extensive rescue package has many more protections for taxpayers than the 3-page bailout proposal put forth by the White House last week.

“In the last week, I’ve personally called over 100 constituents, bankers and business leaders in southern Minnesota to sound them out about this bailout package. The message I’ve heard from them is clear: despite the many and significant improvements made by Democratic negotiators, this bill still falls short.

“The bill we voted on today passes the buck when it comes to recouping the losses taxpayers might suffer. I also regret that this bill does not do enough to help average homeowners, or provide sufficient oversight of Wall Street.

“Wall Street got us into this mess and I hope that the Congressional leadership will go back to the drawing board and write a bill that holds Wall Street accountable, both through sensible regulation and oversight and by restricting the excessive golden parachutes for CEOs who got themselves in trouble.

“My job is to protect the American taxpayer and this plan doesn’t go far enough in looking out for the middle class. It doesn’t go far enough in holding Wall Street accountable. If Wall Street is going to get our money, we need to have some protections in place, and this plan doesn’t go far enough. Finally, it does not do enough to help address the real cause of our economic crisis: the tidal wave of foreclosures that are hurting families and neighborhoods all around the country.

“I voted against this bill because it wasn’t a good deal for taxpayers. Lawmakers need to go back to the table immediately and come up with a much better deal for taxpayers and the middle class.”

Isn’t that the same argument being used to to rush us INTO bailout legislation? Ooo my head!