Useful things Congress could do with $300 billion
Rather than being down on Congress for being corrupt and acting against the interests of the American people, maybe I should offer some suggestions for what they could better spend $300 billion dollars on than giving it to the lenders who created the housing bubble and resulting recession. So, in no particular order, here are some things Congress could spend money on which could help:
Reform GSE oversight (cost guess: couple million)
I'd suggest restricting their loan buying to conforming loans (eg: 20% down, fully amortizing) with a cap of say 5x the average annual income for areas. Enough to finance houses at sustainable prices, but restrictive enough to not get them into the $5.2 trillion dollar debt disaster we are currently bailing them out from.
Develop national RE listing/info database (cost guess: hundred million)
A national database for real estate listing, freely accessible to anyone, with uniform data presentation and historical information, would greatly help illuminate the current RE market situation. It could also prevent the manipulation of sales prices (eg: DAP) by requiring uniform data organization (ie: record where all the money goes, sales price is net to seller, etc.).
Reform Fed oversight (cost guess: couple million)
Congress could make it clear to the Fed that their job is to control inflation, not pump taxpayer money into failing over-leveraged investment banks. They could also set up some rules to make sure the Fed is succeeding, and not diverging into supporting their insider business buddies.
Get rid of the FHA (cost guess: saves money)
Really, the FHA is a poor excuse the subsidize people who should not be getting home loans with taxpayer money. Eliminating it would benefit the country and save money.
There are a couple other small things they could do, like firing Sheila Bair for going on personal crusades instead of doing her job, or reforming the SEC rules to eliminate off balance sheet accounting and market manipulation by the SEC, or investigating Dodd for corruption, but those are minor changes. All the changes above combined would leave roughly $299.8 BILLION dollars left over, which we could actually not spend, and thus not create another $1000 debt obligation for every man, woman, and child in the entire country to pay for paying off the banks which created the recession. That sounds like it would be a smarter plan to me, but then again that's probably why I'm not a corrupt scum-sucking Congressional representative.
I'd suggest restricting their loan buying to conforming loans (eg: 20% down, fully amortizing) with a cap of say 5x the average annual income for areas. Enough to finance houses at sustainable prices, but restrictive enough to not get them into the $5.2 trillion dollar debt disaster we are currently bailing them out from.
A national database for real estate listing, freely accessible to anyone, with uniform data presentation and historical information, would greatly help illuminate the current RE market situation. It could also prevent the manipulation of sales prices (eg: DAP) by requiring uniform data organization (ie: record where all the money goes, sales price is net to seller, etc.).
Congress could make it clear to the Fed that their job is to control inflation, not pump taxpayer money into failing over-leveraged investment banks. They could also set up some rules to make sure the Fed is succeeding, and not diverging into supporting their insider business buddies.
Really, the FHA is a poor excuse the subsidize people who should not be getting home loans with taxpayer money. Eliminating it would benefit the country and save money.
There are a couple other small things they could do, like firing Sheila Bair for going on personal crusades instead of doing her job, or reforming the SEC rules to eliminate off balance sheet accounting and market manipulation by the SEC, or investigating Dodd for corruption, but those are minor changes. All the changes above combined would leave roughly $299.8 BILLION dollars left over, which we could actually not spend, and thus not create another $1000 debt obligation for every man, woman, and child in the entire country to pay for paying off the banks which created the recession. That sounds like it would be a smarter plan to me, but then again that's probably why I'm not a corrupt scum-sucking Congressional representative.
I agree. At the very least they could use the money to help people really in need. It blows my mind that they're putting their efforts into help people keep living in $500,000 houses.
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