It's been a while since I've posted anything, between work, the holidays and the whole family thing I just haven't had time for much else so lets catch up a little bit.
The President seems to have gotten his way with national Health care, much to the dismay of most americans (if you read between the lines you'll see that the only thing that he's really changed is the fact that the insurance companies will now have a lot more mandatory customers!). Now there is talk about Immigration reform and about how we should now bail out a bunch of people with bad mortgages, that's the topic for today.
It seems like everything that the politicians want to do will end with more governmental control and more taxes( or, fees, as they like to call them now, like we're too stupid to know the difference?) piled upon our already dwindling personal resources.
I think that I have come up with something to help bail out the economy without excessive governmental control, let me know what you think.
1.) Get rid of early withdrawal penalties on 401k's, IRA's and other types of retirement accounts, however, there would still be a catch involved.
2.) Any person that has such an account, even if they haven't reached the age to normally withdraw from it, would be able to take money out of their 401k, etc..
3.) This money would be used by the Individual to pay off credit card debt totally and to get their mortgage caught up if they are facing foreclosure, or, are simply caught in a very bad( adjustable rate, etc..) mortgage. The individual would also be able to take money from their account in order to refinance their loan to better rates.
4.) The next time that the individual does their taxes, they would also have to send proof that the money that they took out of those accounts was used to pay off thier credit card debt and that ALL of the cards, with the exception of no more than one or two MAXIMUM were cancelled when they were paid off. They would also have to prove that they'd fixed their mortgage problem.
If these Ideas were utilized, hundreds of thousands, if not millions of people, would be able to keep their homes. The reason that I included credit card debt in my plan is simple.
Millions of people are enslaved by their tax burden, mortgage debt and by credit card debt.
Let's say, for example that Joe Sixpack has an 401k plan that he's had since he first started working, he's in his late 30's or early 40's, his 401k has about $50,000.00 in it. joe has an 80/20 arm mortgage that costs $1500. per month and a total of about $20,000.00 in credit card debt, If Joe has ever been late or missed a payment they may have jacked his credit card rates up to 29% or there abouts. Joe and his wife both have steady jobs but they can barely afford to make the minimum monthly payments on their credit card ( let's say about $1,100.00 a month or so.) debt, if anything happens to his, or his wifes job, then they are pretty much screwed. Because of medical bills or a work slowdown( loss of hours, etc...) they may have fallen behind ($6,000 or 7,000) on the mortgage payments and face losing their home. Under my plan, Joe would take money out of his 401k to pay off the credit card debts, to catch up on his mortgage and to refinance to a much better (4 to 5% or so) rate, if this reduces his monthly debt to$1,000.00 or so for his mortgage, plus the credit cards are all( exept one or two) cancelled and all of the balances are paid off, then, in effect, Joes family has gotten a raise of about $1,500.00 a month, and Joe probably still has $20,000.00 or $30,000.00 left in his 401k ( remember, often times your cedit card companies will negotiate a settlement if you can afford to pay a large portion of the balance owed all at once, assuming that you've carried a large balance forward for a long time.) plan. They've saved their home and they can afford to go out to eat more often, go to movies, buy things(paying cash of course!), save some money, maybe even start investing in stocks or bonds.
If you multiply Joe Sixpacks family by millions( who knows how many?) of americans, then this would probably create many, many more jobs for americans.
The only downsides to my plan are this.
1.) Not everyone has a 401k plan, an IRA account or some other retirement plan that they could take money out of. Unfortunately, there's just no way to solve everyone's problems.
2.) This would require the Government to, in effect, declare a tax holiday on retirement plans and would require them to forego tax/ withdrawal penalties and, ultimately, some governmental control over the lives of those people involved.
That's all for tonight, have a good one and I'll see you on the beach.
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