If Congress Were Serious... Or Even Semi-Intelligent...

Is there intelligent life on Capitol Hill?  How many fingers do those weird politicians have, and can they use them to count?  Has the concept of a zero made it into their culture?

First they conjured a few hundred million to bail out some banks. Then they had seven hundred billion added to the pot. Let us write that on the blackboard, students.

$700,000,000,000.  Seven hundred billion.  The number of seconds that have elapsed since Julius Caesar was assassinated (44 BC - 2009 AD, 2052 years): 60 seconds/minute x 60 minutes/hour x 24 hours/day x 365.3 days/year x 2052 years = 64,765,059,840. If you spent $10/second for 2052 years, you would still not have spent $700,000,000,000!

The Honorable Lunatics voted in October 2008 to spend up to $700,000,000,000 to bail out the failing banks. $350,000,000,000 remains unspent, and there is a strong push by the Obama Regime to have Congress add another $850,000,000,000 to that. Because there is no way the Loyal Opposition can halt this juggernaut, within a short time there may be $1,200,000,000,000 in the pig-trough (that is $100/second for over 380 years, or since the time the Pilgrims landed here).

Let us do this another way. We all remember story problems from high school math. According to the US Census Bureau estimates for 2005-2007 (Table B25087) there are just over 51,000,000 US housing units with a mortgage. Of those, about 23,639,036 (46.2%) had mortgage payments over $1500 per month. The data from the Census Bureau is tabulated below; the upper mortgage payment amount was assigned at $6000/month for calculation purposes. I added the fourth column to arrive at the estimated mean monthly mortgage payment for each category. The final figure of $88,531,316,700 is taken to represent the average monthly US mortgage payment total.

(Sorry about the formatting. I am still trying to figure out why Blogger screws up simple html formatting)


TABLE B25087.
MORTGAGE STATUS AND SELECTED MONTHLY OWNER COSTS
Universe: OWNER-OCCUPIED HOUSING UNITS
Data Set: 2005-2007 American Community Survey 3-Year Estimates
Survey: American Community Survey

United States
	Estimate	Margin of Error	Mean Payment Subtotal
Total:	75,072,666	+/-172,605
Housing units with a mortgage:	51,164,197	+/-123,611
Less than $200	25,783	+/-1,536	$2,578,300
$200 to $299	126,355	+/-2,860	$31,588,750
$300 to $399	381,877	+/-5,296	$133,656,950
$400 to $499	822,717	+/-7,688	$370,222,650
$500 to $599	1,376,810	+/-10,365	$757,245,500
$600 to $699	1,947,454	+/-12,985	$1,265,845,100
$700 to $799	2,462,599	+/-12,073	$1,846,949,250
$800 to $899	2,855,941	+/-15,590	$2,427,549,850
$900 to $999	3,069,593	+/-16,378	$2,916,113,350
$1,000 to $1,249	7,679,899	+/-30,119	$8,639,886,375
$1,250 to $1,499	6,809,133	+/-24,825	$9,362,557,875
$1,500 to $1,999	9,848,125	+/-36,793	$17,234,218,750
$2,000 to $2,499	5,648,279	+/-21,249	$12,708,627,750
$2,500 to $2,999	3,233,753	+/-16,491	$8,892,820,750
$3,000 or more	4,875,879	+/-16,814	$21,941,455,500
Mean Total Payment			$88,531,316,700

Based on the above, $1,200,000,000,000 would pay all of the mortgage payments for everyone in the USofA for about 13.5 months. However, it has been projected that only 10% of the mortgages in the country are likely to default. Since the depression is gathering steam, that is likely an underestimate, but if one could assume that a successful solution could be applied within, say, 6 months time, the default rate might be held to no more than 25%.

The current economic crisis was begun by a collapse of the sub-prime loan market, and spread to the prime market due to fear in the investment arena that further lending would not be secure. IF the government were to somehow guarantee that NO mortgage would be allowed to go into default (in effect, guaranteeing that the investor would be paid for his risk, mortgage lending would once again be viewed as relatively safe and profitable.

As much as the above plan would sell every man, woman, and child in the country into slavery to the off-shore lenders who would once more be emboldened to loan in the American housing market, it would be far more sensible than the current balloons being floated that have to do with judges being able to re-write the terms of loans. It would also lend itself to being implemented as a refundable tax credit, paid in advance, and as such, would offer almost immediate relief (at least as soon as the rules could be drawn and the forms printed). Finally, while it would not deliver any pots of money to the scum-bag bankers that got us into this mess, it would directly benefit the general population, and, in restoring confidence to the money markets, would ultimately create jobs, allowing people to work themselves off the program over time.

Details would have to be hammered out; cut-off dates (I would suggest rescuing only loans made prior to 1-20-2009), tax refund rules, possible upper limits to payments (the current regime made a big campaign point of not giving tax breaks to the RICH), and restrictions on passing the bailout to third parties, are items that would have to be fought over.

If a worst case scenario of 25% potential default (25% of all mortgages needing such insurance), the bill would come to roughly $265,593,950,100 per year. There would be enough in the pig-trough to pay one-fourth of all USofA mortgages for about 4.5 years. That should be sufficient time to get over our economic sniffles, and would guarantee a resounding re-election for BO & Company.