Dear Mr. President Obama,

Please consider my crazy-insane solution for all American Freedom forever.

USA is paying $ 450 Billion dollar in the interest payments. Next year it will $ 525 Billion and then following next year will be $600 Billion dollar. Before you give us loan modification, please ask and get the loan modifications on all US obligations, especially from the foreign powers that dumped the cheap goods here and opened the main canal for them to suck the dollars. With the saving of one trillion five hundred billion dollars, we can accomplish followings.

1. Pay off all US home mortgages over next four years to 50% LTV. All mortgages will be solid. Banks will be liquid and no more toxic assets on their balance sheets.
2. US Home owners will be rock solid for their retirements. In exchange, Social payments will be reduced. This is like raising income of each household for almost $ 20-30,000 forever. In exchange, home owners will give you 2nd TD at 1% interest rate (which Banks offer you anyway). You will be paid back when property is sold or refinanced again. Additionally home owners will loose mortgage deductions.
3. Require US bank to waive interest on mortgages for four years in exchange of 1/4th principal payments or reduce to the rate that they pay. (It is better than writing off 40% of loan balance).
4. Since Americans will be saving $ 250-300 billion dollars in interests, the savings will be circulated many times in economy. As Fed and states collect 40% of all income as the taxes, this will pay itself $ 350 billion that USA will be investing with American Home Owners every year for next four years.
5. Require all Banks to invest these mortgage principal payments in small businesses and starts ups and not in foreign securities. It will create more jobs, more income for the treasury.
6. American Credit card debt will be reduced. Require Banks to reduce the interest rate to 5%. It is a good return when Banks are getting money from Fed at 1% or less.
7. Home owners will have purchasing powers of $ 250 Billion dollars boosting unprecedented consumer spending every year.
8. What do you do with all these 2nd mortgages? You can securitize. With US backing, it can get triple”A” rating and get your money back in a year so
9. Homeless problem almost solved.
10. More Kids will be in colleges.
11. What about people who do not own home now? Give them 20 Years tax credit of equal value if they buy home.

Most politicians and Nobel laureate economists will say this will never work. After all, they were wrong all the time. Give me the chance one time. With my plan, everybody gets what they want. You get your money back. Bankers are liquid and lending again. Americans are happily living in their home forever. Credit cards are gone. Only difference with your plan and my plan- How do bankers get the money. Hope to hear from you soon.

PA

Note to my blogger friends- Hey if you like the idea send it to your friends.