Mr. President,

And the members of United States Congress

After two years of treatment and several shots the patient (economy) is still struggling to get up and run. While you are thinking of alternative care for the patient, let me suggest that your cure was to treat the symptoms and not the cause. Our wounds are much deeper and our cares were superficial.  In order to understand the economy, we need to understand the very basic human nature. By nature we seek safety and security.

For fifty years or more, we were brain washed into thinking that a consumer driven economy is good. We invented credit cards to lure us to spend more and throw us into uncontrollable debt. We adopted this same path for government spending. We discouraged savings with fiscal policies. Look at China and India’s saving rates. Would you feel secure having more debt or having money in the bank?

We Americans adopted life styles beyond our means. We were sold on having TV’s in every room, garages with three cars and expensive vacations. When we could not afford them, easy financing was available. This went on in every part of our daily lives. We had to have different clothes and shoes for every activity, occasion and what not. Celebrities perpetuated myths of glamorous life styles. Middle and lower economic classes were sucked in whether they could afford it or not. We were sold a wrong life style, incorrect beliefs and destructive habits.

When the foundation of my house is weak, I cannot cure it by redecorating the walls. That is what congress and each president (including you Mr. President) has done. Each successive recession became  harsher and harsher. The path to long-term recovery lays in the micro element of the economy i.e. each individual human being. Instead of providing education and skills to all poor students, we spent a trillion dollars on a make believe war in Iraq, with no national interest served. We have housing that we cannot afford, we have a health care system that ruins us, and we have expensive education systems that do not encourage people to study. These are the result of past wrong doings. Every congressional law is modified and affected by the lobbyists whose narrow and divisive outlook ignores broader national interests.  Our elections are bought and sold by the moneyed interests. We, the people, remain spectators in this drama. We need to return to the very basics of life. Each individual is a micro unit of the national economy. Cure the micro unit and you will cure the national economy. It will take longer, perhaps beyond your presidency, but you will be remembered as the president who changed history.

Each individual must be properly educated, trained in skills he shows an aptitude for and be provided for earnings sufficient for a decent and respectable living.

• We must unlearn our ways of wasteful living.
• We must adopt fiscal policies to encourage saving
• Our domestic needs must get priority over foreign needs
• We must stop thinking of ourselves as world police. Reduce defense spending to .20 on the dollar collected. No nation is capable of attacking America. It is a defensive establishment that led us to believe in foreign threats.
• Our foreign policy and economic policy must co-relate and coordinate
• It is wrong to think that the size of our national debt is not an issue. 40 cents per dollar goes for the debt service. Think about this as putting back in the pockets of individuals and see how it makes a difference.
• We cannot run a debt trade policy. Look at what China is doing with their excess dollars. She is buying mines in Africa to control the future world economy
• Our constitutional fathers did not envision TV’s, cables and internet. Democracy must not be purchased by the money sources. Mag Whitman purchased the nomination with 80 million dollars and will rent governors mention with another few hundred millions. Is this the democracy that we are proud of? Unless we get rid of the money element from the elections, our national interest will take a back seat.

Nobody is more interested in fixing the economy than you. Fix the problems at the micro level and you have fixed the problem. Housing is turning out to be a crucial wheel in the present crisis. Let me suggest a most radical and out of the box approach. This is my crazy-insane solution for all American freedom forever.

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

1. Pay off all US home mortgages over the next four years to 50% LTV. All mortgages will be solid. Banks will be liquid with no more toxic assets on their balance sheets.
2. US homeowners will be rock solid for their retirements. In exchange, Social security payments will be reduced. This is like raising the income of each household by 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 the property is sold or refinanced again. This will also stop additional borrowing on the property. Additionally homeowners will lose mortgage deductions.
3. Require US banks to waive interest on mortgages for four years in exchange for the 1/4^th principal payments or reduce the rate that they pay. (It is better than writing off 40% of the loan balance.)
4. Since Americans will be saving $250-300 billion dollars in interest, the savings will be circulated many times over in the  economy. As Fed and states collect 40% of all income as taxes, this will pay $350 billion that the USA will be investing with American Home Owners every year for the next four years.
5. Require all Banks to invest mortgage principal payments in small businesses and starts ups and not foreign securities. It will create more jobs and 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. What do you do with all these 2^nd mortgages? You can securitize. With US backing, it can get triple “A” rating and get your money back in a year or so.
8. Homeless problem almost solved.
9. More kids will be in colleges.
10. What about people who do not own homes 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 one chance. 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 homes forever. Credit cards are gone. The only difference with your plan and my plan-How do bankers get money. Hope to hear from you soon.

-APU-

P.S. – Visit me at www.divinereflections.org or www.foreclosureworkouts.info