That's right folks, over 1/2 of our annual GDP has been borrowed or printed in order to fix the problems of bad mortgages and freezing credit markets-at the behest of our hedge fund government. Feel like working for free for 6 months?
In light of our central planners' actions, I will throw out my solution for the problem at hand; keep in mind, this is a satirical solution in the same form of 'The Candle Makers' Petition' and 'A Modest Proposal', from times long past.
I, Jeffrey Moore, hereby proclaim that the government should use all bailout monies to buy up no less than 1/3 of the nation's residential real estate. In turn, this act will stabilize not only the housing market, but the world economy.
Presently, the bailout and related actions have cost the taxpayers roughly $7.36 trillion. If that number is divided by the US median home price of $200,000, the government could have used the money to buy just a hair under 36 MILLION houses-granted, the median price is not the average, but, it certainly gets my point across... 36 million houses is just over 3/10 of the roughly 113 million households in the US (which is significantly higher than the number of houses in the US-it counts apartments as households). While this would be difficult for anyone (including Uncle Sam) to do because of supply and demand issues, they can conveniently do a Texas Two Step... Eminent Domain would be a convenient and constitutional way to temporarily repeal The Law of Supply and Demand!
Now that the government has bought all of these houses, what in the world are they going to do with them? What else could they do but tear them down!? This would in effect, create a ginormous shortage of housing; which, when coupled with interest rates that are far too low for comfort, would rejuvenate the economy.
'How would this rejuvenate the economy?' you ask... well, we could start off by using the Law of Supply and Demand (which the central planners in DC would have again allowed to take effect); a housing shortage will drive prices up-quite significantly at that. With prices going up, it would make all the CDOs floating around out there suddenly worth well more than their weight in gold. Thus, all the banks with 'bad debt' on their books would also be sitting on a pot of gold instead of enough toxic waste to make them sterile for generations.
Just think-no more cash infusions from Washington would be necessary! The construction industry would buck up! People would be employed in a way that is much better than in 2007! We wouldn't have to worry about insurance companies collapsing either-after all, who wants to worry about their annuities being worthless?
Sure, with this solution, a bunch of people would have to be temporarily housed in homeless shelters, but these shelters would be made up of people that have good jobs... as contradictory as it sounds, America would quite literally be full of rich homeless people. I don't guess that it would be too bad of a problem to have. I mean, Ruth's Chris or Steak n' Shake could cater to the shelters-so it wouldn't be all bad (most would eat much better than they presently do).
Aside from the overflowing homeless shelters, the only other 'problem' would be that the price of treasury notes would fall precipitously, since money would be rushing into areas of the economy that actually have room to grow-I can hear Ron Paul's reaction now... 'Dammit! Now the government can't spend it's way to our success!'
Heck, my solution is practically the only thing that could make TBT be more or a sure fire winner than at present.
To a better economy (and slightly more oppressive government),