Bailout for the Rest of Us

I'm bummed about the nationalization of Wall Street firms.

$700 Billion could be better spent bailing out American citizens who made poor debt choices. The money would still go into the banks and our overall ability to remain solvent would increase. Here's the plan.

This program is voluntary. In exchange for a capped credit limit, excess personal debt (esp. credit cards) will be paid off by the IRS. Only individuals would be eligible, no businesses (e.g. corps, llc, llps, Sole Proprietorships)

This program will be funded by the "Bailout Plan" and implemented through personal tax returns to the IRS.

Someone wishing to participate would submit a copy of their credit report, listing all outstanding debts and revolving credit lines. Likewise, they would submit a form permitting the IRS to payoff their creditors and agreeing to only accept a credit line of one-third of 90% of their taxable income. (the other 10% is for savings). The participants credit report will be flagged with this agreement so that any subsequent applications for personal or revolving debt be alerted to their participation. This would not effect mortgage or auto loans applications, and may in fact improve the score for such loans.

Any excess owed over one-third of 90%, would be paid off directly by the IRS and credit limits reduced and limited for a period of time, perhaps 24-36 months.

This would provide a one-time inflow of cash to institutions who loan to individuals, as well as, reduce the overall interest payments of the US. Credit limits would be cut to a manageable amount.

The benefactors of this plan are not Wall Street Corporations, but American Citizens (and their creditors). Sure, some irresponsible people would benefit from this program, but many more responsible people would also benefit.

Those who want to keep their high credit limits, do not have to participate in the program.

not breaking any new ground here

I imagine that most blogs start with posts that contain the words "first post". Expect to see a lot of political commentary, self-promotion, and product rants on this thing. Which I suppose most blogs contain. I guess I'm not breaking any new ground here.

More to come once I learn more about this.