Jan 2008

An alternative

I was reading an article and stumbled across the phrase “a $1.5 trillion war in Iraq”. One and a half trillion dollars, in essence, pissed down the drain. And very little to show for it except a shitload of murder and mayhem.

It struck me that in terms of cold dollars alone, that spectacular blunder has pretty much caught up with Dubya’s $1.6 trillion tax-cut (implemented a few months prior to September 2001 and now a forgotten, minor footnote in a dire presidency).

But lately I’ve also been reading a bit about the US sub-prime credit crisis that’s been giving the global economy a serious kicking. It turns out everyone’s in a tizz about a 600-800 billion dollar hole in a total housing debt of 1.9 trillion.

You see where this is going, don’t you?

I may as well make it explicit… while it’s throwing trillions around, why doesn’t the US government declare a Housing-Debt Amnesty? How about this… the treasury pays 100,000 dollars off every single mortgage*. No means testing, no favouritism, just a flat payment. For most low-income homeowners (i.e. the ones currently defaulting in large numbers), 100k will cover the entire loan leaving them outright owners of their property. For everyone else, it’ll ease the burden. What a gift to the poor homeowners of America! The president who did that would end up on Mount Rushmore.

I’m sure a passing capitalist can explain why it’s a bad idea.

Incidentally, I’m well aware that the really poor people aren’t homeowners at all, and this doesn’t help them. I’m not suggesting this is a solution to poverty. I’m just suggesting it’s a better way to spend a trillion and a half dollars than blowing up another country, or tax breaks for the wealthy. Oh, and before you complain about banks getting paid public funds… I’m making a value judgement here: it’s better to give public money to banks in return for houses for poor citizens, than to give public money to Blackwater in return for killing foreigners.

* Number plucked out of the air. Clearly if such a policy were undertaken, we’d do a bit more maths first.

Posted in: Opinion