Estimated US population as of July 2007: 301,139,947
Number of US homeowners in 2004 (the most recent stats I could find): 73,800,000
Percentage of mortgages in foreclosure or pre-foreclosure in January 2008: 9% (or approximately 7 million)
That 7 million mortgages in default or pre-default apparently represents that 700 billion dollar “bail out.”
I don’t pretend to understand finance or the “financial world” in general. If I did, I’m sure I would be a much wealthier person. But:
If the Federal Government gave each of those 73.8 million homeowners 1 million dollars, the total payout would be 7.38 billion dollars. If the Government required each of those homeowners to take that million dollars and pump it back into their mortgages, it seems to me that would “bail out” both the homeowners and the financial institutions. Once a homeowner’s mortgage is paid with the one million dollars, the remainder (if any) can be considered a “stimulus package,” as it would be funneled back into the economy by either paying of debt, upgrading a home (which many families would do if their mortgages were paid off, thus stimulating more economic growth for financial institutions), or run-of-the-mill purchasing. This seems to be a win-win proposition – though again I have no real understanding of finance.
What about the part of the US population that doesn’t own property? Well, given that the Federal Government has just saved 690 billion bucks by bailing out homeowners instead of financial institutions, a stimulus package could be offered to US tax-paying citizens. Let’s just say that of the remaining 227,339,947 people in the US, 200,000,000 of them are tax-paying citizens (not true, I know, but it makes the math easier). If the Government paid each of these persons (each person, not each household) $1000, the stimulus payout would be 200 billion. Homeowner bailout and stimulus package together would make a total Governmental payout of 207.38 billion dollars – which, seems to me, saves the Federal Government 492 billion dollars and still generates the desired effect on the economy.
This makes total sense to me. I’m sure I’ve oversimplified with my ignorance
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8 comments:
There are a lot of zeros here, but doesn't 73,800,000 X 1,000,000 = 73,800,000,000,000. (trillion)
I'm not sure about this. The zeros make my eyes cross :)
I'm not sure about my math either. I don't have a calculator that will perform the function because there's not enough space on the face. :-) I wondered about that, but I do think that I'm right, because 999,000,000 + 1,000,000 equals 1 billion. Think of that in terms of "times 7" and that's the figure I initially came up with. "Trillion" doesn't even come close. But math has never been my strong suit, either!!!!
Mine wouldn't go that far either so I used the little one included in windows.
Are you saying give the 7 million people who are in trouble one million 7,000,000 X 1,000,00.00 = 7 trillion or all home owners: 73,800,000 X 1,000,000 = 73.8 trillion.
I'm still not sure I'm right either, lol! We're talking about 73.8 million a million times, right? THESE NUMBERS ARE TOO BIG TO UNDERSTAND!
PS did you know we have been talking about your post on Time Travellers blog? ;)
http://twentysomethingnowwhat.blogspot.com/2008/10/deception.html
I think you are right... I calculated incorrectly. So much for my wonderful plan!
Ha! Your thinking was still better than what the government is trying to do. At least with your plan the money is going to the people in trouble. What the government is doing won't reach the people who need to be helped to fix the problem. At best it will just delay it.
Think about this. The banks will make money off of the money it gets from the government. yep, the banks will charge us interest for loans they give us using money we gave them. Is that not screwed up or what????
The link I posted earlier was suppose to be
http://twentysomethingnowwhat.blogspot.com/2008/10/deception.html
I didn't paste the whole link for some reason.
LOL, well if the banks let ME do the math, they'll definitely make money. Or something. LOL
Do you have copy writer for so good articles? If so please give me contacts, because this really rocks! :)
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