Here’s my plan to jump start the economy. It involves payments to all home owners. The price tag, though, is not cheap.

 

After weeks of reading publications and blogs and watching news and business shows, I have come up with a plan.

 

This plan is also designed to spark conversation. Please comment to info@johndaly.tv

 

The plan is simple. Give each homeowner or household $100,000.

 

The money is theirs; no strings attached. Sixty percent of the people will use it to reduce their mortgage payments to either stay in their house or sell it. It will be a windfall for the 40% who own their home free and clear.

 

Why might this work?

 

One, it gets the money into the hands of the people who are the catalyst for the U.S. and the world economy – the U.S. consumer. Once money starts moving in America, the rest of the world will begin to unclog. Like it or not, we are still the world’s super power and everything revolves around us. That gives us great advantage and great responsibility.

 

Two, it puts the onus on the American people – not just American industry. The American people will decide if it’s worth refinancing or buying that new car. They may want to use it for education to get re-trained for the new economy, so they can compete for future jobs.

 

Three, it also relieves the government of bailing out and micro-managing the U.S. auto and financial industries. Let the consumer bail out the auto industry by buying cars. And, let’s have the financial institutions, especially the ones who said they didn’t need the TARP money, give it back and the government will return the 5% ownership in the companies.

 

Four, it will keep people in their homes. Neighborhoods, the backbone of our culture, will not be at-risk.

 

Five, home prices will stabilize. Since there is more money for folks to spend on a new home, inventories of homes for sale might start dropping.

 

Six, the government is getting money into the hands of the most responsible consumers. Granted, many homeowners made some bad choices in over-leveraging their homes. But most of these people were trying to invest in the American Dream; we can’t discourage that. And furthermore, do we really think we’ll see mortgage offers like the kind we had in 2002 to 2005? I doubt it.

 

Plus, the majority of homeowners are baby-boomers and older. Most of us boomers-and-up have parents or grandparents, now in their 70s and 80s, who lived or experienced The Great Depression. This past six months has transported us back to that very frightening time. Trust me, my Dad has been gone since 1984, but he still reminds me each day when I leave a light or TV on, “It’s seven cents a kilowatt hour.” I think many of us are now for the first time counting or scrutinizing things like kilowatt hours.

 

Seven, I would give money to the person who rents out their home. Why should we exclude these entrepreneurs? Anyway, the ones who were wild speculators are gone from the market by now. And it would be too difficult and costly to determine who lives in a house they own. Can you imagine the evictions? It’s not worth it. Make the transaction easy for the government; they credit the person or persons paying the mortgage.

 

Eight, my plan frees the Obama Administration to concentrate on long-term financial reform. The new team needs to be working with the world’s markets to create transparency and simplicity in the financial instruments, so we don’t get into this trouble again.

 

Are there problems with this plan? Yes, there’s one big one. It will cost $7.5 trillion.

 

I arrive at that figure by multiplying 75 million homes in the U.S by $100,000. Our national debt is over $10 trillion right now. I’m adding significantly to it. Instead of every person in debt of $34,000, it will be something like $55,000. That means we’re placing even more burden on our kids and grandkids.

 

I’m banking on a couple of things in the future. My hope is we will find new and less expensive energy sources within the next few years to jump start the world economy again. My other hope is world cooperation. The gathering of the G-20 was inconsequential in the short-run. But I believe with a more conciliatory U.S. Administration in office, we should see governments working together. Yes, I’m cringing at my Pollyanna self too. However, I think we’ve seen some of the petro- dictators realize how much they need us.

 

Another problem with my plan: it discriminates against non home-owners. My hope is this plan will have a trickle down effect to them, lowering rents and the staples of living.

 

There have been plenty of other plans put forth over the Internet. One of them suggests we give every American $1 million to spend. On the surface that sounds good, but when you work the numbers it makes no sense. That would cost $305 trillion or $305,000,000,000,000 which is 30 times the current national debt.

 

Even though I don’t like the person’s math, I like the out-of-the-box thinking.

 

Give me yours.

 

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