Tuesday, November 25, 2008

Headline Today from the AP: Government Plans New Program to Aid Credit Issuers

Government Plans New Program to Aid Credit Issuers...

Now, let me get this straight. This whole crisis is predicated on the fact that all these banks and financial institutions issued bad loans that the borrowers could not pay back. Right? Right. That's pretty much all of this boiled down.

So, instead of giving the institutions MORE money to lend out, and then find out they're using the funds for something else, like buying other banks (PNC buying National City), which will therefore not in any way solve any problems, perhaps it's time to bail out the actual taxpayers and wipe out THEIR, or rather OUR debts. Now, then. Wouldn't THAT stimulate the economy? I mean, think about it. If we had about $1400 LESS to pay in credit card bills and student loans per month, we'd actually be able to buy groceries and clothing, as well as the rare "luxury" item, like new windows on our house or something.


1 comment:

cool yiddishe mama said...

It's a valid issue. All told (before we took the steps we did), we had a debt to income ratio surpassing 70% (including mortgages, car payments, 401k payback, and credit cards). It's a vicious cycle. We did not get into trouble charging toys but essentials like food, gas, and diapers. Within nine months of implementing our plan, we are down to one creditor we are still battling. (We paid them the agreed upon settlement but they never sent the paperwork to us.) It dropped our FICO by more than 200 points but cool yiddish papa can already re-open credit in his own name.

We had amassed $55K in credit card debt and settled out for just under $13K. (We admit our role in the "bad debt" the banks have now, but it's just as much their fault.)

When banks issue credit, they are supposed to assess your credit risk. However, in recent years, they have been approving people who almost don't deserve a fraction that they have been granted (us included). They are hoping you will be irresponsible with credit since their bread and butter are finance charges and late fees. They make nothing on the "deadbeats" (those who actually pay their bills in full each month).

CYP plans on approaching the new Sec of Treasury as a Fed colleague in hopes of reforming the banking industry.

I'll tell CYP to post his plan if you like. It's a good one...