What would you do?

[robr]

What if I don't have a mortgage because I can't afford to buy a house because they're all overpriced and it's difficult to get a loan unless you have stellar credit? So homeowners get a break, but renters get nada? I don't like your proposal . Give me $200K and I could go buy a house!!

Of course if renters all got $200K, Steve might find himself with a lot of vacancies .

 

[steveny]

What if I don't have a mortgage because I can't afford to buy a house because they're all overpriced and it's difficult to get a loan unless you have stellar credit? So homeowners get a break, but renters get nada? I don't like your proposal . Give me $200K and I could go buy a house!!

Of course if renters all got $200K, Steve might find himself with a lot of vacancies .

If renters got up to 200k to pay off debts I would get a $hit load of judgements owed to me I can tell you that for sure.:biggrin:

If you don't have a mortgage rob you could use up to 200k of debt forgiveness to pay down car debt, student loans, credit cards, whatever. Then you would have all of your income free and clear to use towards a house.

 

[TripleL]

Although my initial response wasn't completely inline with where steveny was heading, more than 1/2 of the money I would gain by not having a mortgage (my only debt currently) would be poured back into the economy as steveny said.

As to what the more global and economic impacts this plan would have, I'll keep reading the responses as you all are much more qualified than I to 'what if' this :smile:

 

[steveny]

Although my initial response wasn't completely inline with where steveny was heading, more than 1/2 of the money I would gain by not having a mortgage (my only debt currently) would be poured back into the economy as steveny said.

As to what the more global and economic impacts this plan would have, I'll keep reading the responses as you all are much more qualified than I to 'what if' this :smile:

Yeah I would like to hear some examples of why it's a bad plan.

 

[robr]

If renters got up to 200k to pay off debts I would get a $hit load of judgements owed to me I can tell you that for sure.:biggrin:

If you don't have a mortgage rob you could use up to 200k of debt forgiveness to pay down car debt, student loans, credit cards, whatever. Then you would have all of your income free and clear to use towards a house.

What if I have virtually no debt? If I go to buy a house, do I get $200K off the loan interest, or perhaps no federal taxes until I've saved $200K?

 

[steveny]

What if I have virtually no debt? If I go to buy a house, do I get $200K off the loan interest, or perhaps no federal taxes until I've saved $200K?

Nope you wouldn't get anything, sorry rob you know I love you but this plan is only for those who have spent spent spent and now have the banks on their backs.:biggrin:


Actually it would directly benefit all the people who have kept the economy going and indirectly help everyone else too. It would also be a huge slap in the face for those who have spent their lives on public assistance. That's the part I like about it. It says, hey you should have given it a shot but you chose to take the lazy path. We can still hand out measly payments to you but look what we gave the people who at least put in some effort.

 

[robr]

Nope you wouldn't get anything, sorry rob you know I love you but this plan is only for those who have spent spent spent and now have the banks on their backs.:biggrin:


Actually it would directly benefit all the people who have kept the economy going and indirectly help everyone else too. It would also be a huge slap in the face for those who have spent their lives on public assistance. That's the part I like about it. It says, hey you should have given it a shot but you chose to take the lazy path. We can still hand out measly payments to you but look what we gave the people who at least put in some effort.

Then I don't like your plan . I *WANT* real estate to collapse and people to be thrown out on their asses and banks to take over everything. The result is that it will drive the prices of RE down down down and people like me who didn't buy something they could not afford will NOW have a chance to get into a house that's priced more realistically.

 

[steveny]

Then I don't like your plan . I *WANT* real estate to collapse and people to be thrown out on their asses and banks to take over everything. The result is that it will drive the prices of RE down down down and people like me who didn't buy something they could not afford will NOW have a chance to get into a house that's priced more realistically.

You got to know by now this country doesn't reward people who do the right thing.:biggrin:

Don't forget the North East RE won't collapse. There is a funny billboard right outside the Syracuse NY Airport where I pick up investors that come into the area to take a peak around the billboard says "real estate prices in the rest of the country got you feeling :frown:" The real estate prices here will keep you :smile: ing.
Property here has actually gone up in value. It has forever. Look at some of the posts I put up over the past few years. I remember someone posting this area will be a ghost town and I replied it's been this way forever just slow steady growth. I wonder how the prices on RE are now in that other posters area? Slow and steady wins the race and although this place is a back wards head scratching area it's stable. Now how do I get the weather to be like Florida or California. The weather will eventually drive me away from here, 18 degrees right now.

 

[4AU4LIFE]

So this plan would erase all the debt you currently have i.e. car, home, CC, etc. with a $200K cap correct? and then the $$ that you earn that you would normally spend on your monthly bills could be spent on other things to help boost the economy?
By that way of thinking, I would certainly have a change of heart on my spending habits.
However, wouldn't it just be giving all those folks that have charged everything single thing they wanted on their CC a free pass? I don't think it would be right for people to be able to go out and max their CC and then have big brother wipe the slate clean for them. They should be held accountable for all the needless purchases.
Now if this happened suddenly and caught everyone off guard then I could see how it could work. But if this idea was floated around and people figured out a way to beat the system then I don't like it.
Total debt for me including mortgage is ~1/2 the cap figure.
I have chosen to live within my means so that is why the crappy economy hasn't hurt me very bad....yet.

 

[Briank]

I would buy an Airplane.

 

[steveny]

So this plan would erase all the debt you currently have i.e. car, home, CC, etc. with a $200K cap correct? and then the $$ that you earn that you would normally spend on your monthly bills could be spent on other things to help boost the economy?
By that way of thinking, I would certainly have a change of heart on my spending habits.
However, wouldn't it just be giving all those folks that have charged everything single thing they wanted on their CC a free pass? I don't think it would be right for people to be able to go out and max their CC and then have big brother wipe the slate clean for them. They should be held accountable for all the needless purchases.
Now if this happened suddenly and caught everyone off guard then I could see how it could work. But if this idea was floated around and people figured out a way to beat the system then I don't like it.
Total debt for me including mortgage is ~1/2 the cap figure.
I have chosen to live within my means so that is why the crappy economy hasn't hurt me very bad....yet.

Yep, that's the idea. The over spenders who don't give a rats ass have already lost their assets which they over borrowed on. This program would help those who are holding on as they have some self respect. This isn't going to help the people who went balls to the wall and have already lost everything. It would help the prudent.

 

[steveny]

I would buy an Airplane.

Buy buy buy the economy is gang busters. Sounds like a pretty good plan so far. Still waiting for someone to shoot it down. Still waiting for someone to step up and explain how it's going to stop the banks from going bankrupt which looks to be where most are headed anyways.

I know, I know all the retirement funds are wiped out er I mean would be wiped out.

The only thing my plan will prevent is the ultra rich not being able to buy up cheap assets when it all falls apart. Unfortunately the ultra rich also set the rules.

 

[Daedalus]

It would help the prudent.

I can't imagine the social unrest this would cause. What about moral hazard? How does this plan ensure it only rewards "prudent" people? I'm prudent, that's why I *don't* have $200k in debt. The blue-collar folks next door have more than $200k on an ARM, based on county records. The ARM wasn't "prudent" IMO, and if my estimation of their income is close, neither was buying the truck, SUV and RV parked on the street. Similarly, what about the strawberry picking couple making $18/hour combined who bought a $350k house with an option ARM? Will this plan take effect before or after their loan resets and they're forced into foreclosure. A lot of rate adjustments have yet to happen, meaning some "balls to the wall" imprudent people would be rewarded. If I woke up one day to find they got a bigger handout than me I would be pretty darn upset.
Who's going to pay for this $200k? Won't it cause inflation and devalue our currency? Won't it encourage reckless behavior? How will it keep people from levering up and recreating the same problems we have now as soon as their slate is wiped clean? What about all the debt that is owned by smaller banks that aren't in trouble and foreign entities...do they and their shareholders just get the shaft? Do we want to keep propping up property values? Houses are not affordable--that is the problem. So we keep some over-leveraged people from losing their homes; what about the next generation? Do we give them $200k so they can afford a home, or hope that wage inflation takes hold?

 

[sahtt]

I can't imagine the social unrest this would cause. What about moral hazard? How does this plan ensure it only rewards "prudent" people? I'm prudent, that's why I *don't* have $200k in debt. The blue-collar folks next door have more than $200k on an ARM, based on county records. The ARM wasn't "prudent" IMO, and if my estimation of their income is close, neither was buying the truck, SUV and RV parked on the street. Similarly, what about the strawberry picking couple making $18/hour combined who bought a $350k house with an option ARM? Will this plan take effect before or after their loan resets and they're forced into foreclosure. A lot of rate adjustments have yet to happen, meaning some "balls to the wall" imprudent people would be rewarded. If I woke up one day to find they got a bigger handout than me I would be pretty darn upset.
Who's going to pay for this $200k? Won't it cause inflation and devalue our currency? Won't it encourage reckless behavior? How will it keep people from levering up and recreating the same problems we have now as soon as their slate is wiped clean? What about all the debt that is owned by smaller banks that aren't in trouble and foreign entities...do they and their shareholders just get the shaft? Do we want to keep propping up property values? Houses are not affordable--that is the problem. So we keep some over-leveraged people from losing their homes; what about the next generation? Do we give them $200k so they can afford a home, or hope that wage inflation takes hold?

You wouldn't make it too far in the government. Way too many questions.

 

[burbel]

I was going to try and post a reply, but this is one of the most offensive ideas I have ever heard, and to be honest I just became...

The thought that people that spend their money on crap they don't need moves this economy forward, and folks that spend and live within their means are bringing it down... Speechless.

 

[Sarge]

You got to know by now this country doesn't reward people who do the right thing.:biggrin:

Lol thats for sure.

 

[steveny]

The thought that people that spend their money on crap they don't need moves this economy forward, and folks that spend and live within their means are bringing it down... Speechless.

But it's true spending moves the economy forward.

I think a lot of people missed the point. I am not talking about handing out the money to the strawberry pickers who are making a combined 18/hr and are behind on their payments. I am talking about giving away the 200k to the strawberry pickers making 18/hr who have also taken on a night job and sold their car and tv set so they haven't missed a payment. Maybe I used prudent when I should have used a different word.

 

[SOURCE 1]

If there was any possible way to filter out the idiots that mortgaged everything to the max and blew it on H2's and boats etc... and put this money toward the people that deserved it I would say it is a great idea.

 

[steveny]

If there was any possible way to filter out the idiots that mortgaged everything to the max and blew it on H2's and boats etc... and put this money toward the people that deserved it I would say it is a great idea.

let's hear your idea for a filter.

 

[JonBoy]

Extra $1.5K to $3K a month?

In all honesty, I pay my debts before I play. I recently got paid a rather large amount (relative to my income) and right now it's actually just sitting in my savings account while I decide how I want to use it. I could pay off cars, put it towards my mortgage, do some renovations, or mix and match between these things.

However, given a fixed extra amount each month, I would definitely spend some of it on "fun" things. I work hard so I believe I deserve some nice things as well. I'd probably better equip my car for tracking: track-only wheels and tires, upgraded brakes, etc, etc... Other than that, not much except probably travel/vacation a bit more. I'd definitely buy non-essentials more often but I definitely wouldn't blow it all.

However, over time, with my debt reduced, I'd definitely be using that money for fun things more than I do now. I'm financially conservative by nature so I'd save before I played but I'd still definitely have some fun.