A simple and effective way to save our economy.
I have spoken to my friends and business associates about the following changes and to date no one has been able to tell me why this plan wouldn’t work.
So I ask you to read the following with an “open mind” and to see it for it’s utter simplicity.
I’m not saying it would be easy to implement – but I am saying the concept is relatively straight forward and that’s what makes it so attractive as a solution to our current economic problems. It’s generally accepted by most people that the surest and best way to build wealth is through real estate and more specifically home ownership.
So if we truly care about others then why not do something that makes it easier for the lower and middle class to own their own home?
Why don’t we help ourselves as a society at the same time?
Why don’t we put much needed monies back into government coffers?
I have a simple and very effective solution that will do all of the above.
I invite you to pass along this article or direct people to this site if you are in agreement with what I am about to say. The more people that know about this the better – and if we are lucky maybe the right person will read this and then act on it.
Here’s my solution.
If you want to buy a house – you purchase it directly from the government – and you pay the government a flat surcharge of 25% of the purchase price for this ability.
Therefore a $400,000 house would cost you $500,000 in total (plus any taxes).
Now why is this idea so good?
1) The consumer wins because he/she cuts their mortgage payment by about 25% ($1666.67 25 yr amortization / 5% down – equal monthly payments) vs bank ($2210.10 5 yr term / 25 yr amortization @ 5% int rate).
a) So tell me what would you do with an extra $544.00 per month or roughly $6,500 per year?
b) What would you do with the $166,000.00 you would save over the 25 years of the amortization period?
c) This would open up home ownership to a whole new level of consumer. A $300,000 condo or townhome would cost the average consumer $1200.00 per month plus strata fees (this is closely on par or just above what a lot of 2 bdrms cost to rent!).
How would that impact your life?
You would probably save it or spend some of it – the money you spent would most likely go directly back into the economy while the money you saved would go into our banking system, etc…
2) The government wins because with this winfall revenue stream they could now have billions if not trillions of extra dollars for government social programs, roads, infrastructure, medical care, schools, etc…
Rules:
* You could only use this on a primary residence
* 1 home per person
* Flipping would not be allowed
Who would lose?
As in anything, there are winners and “losers” but I would put forward that the advantages to this program far outweight the “costs”.
Banks. Yes banks would vehemetly oppose this and would spend years and millions of dollars lobbying key government officials telling them why this wouldn’t work. Don’t you just love politics?
To date I have discussed this idea with hundreds of people and the only argument I have heard against my proposal is that it is “socialist in nature” and does not represent true capitalism.
So I have a challenge to people who “think” that way.
When things go bad, why are the first people with their hands out, large corporations?
How much money did AIG get to bail themselves out? How much did the big car companies get? Big banks?
How much did the little guy get?
In fact when the banks and AIG got their money – did they pass any of it along to the little guy to help him save his home?
Sad but true. No one was there to help the people who had to foreclose and walk away from their homes.
Are huge bail outs in a free market economy, capitalist in nature or an example of us practicing socialism when it’s “convenient” for big business?
It’s high time we started really thinking about the systems we use and just how effective they really are.
Education:
I really do believe that our future depends on how well educated we are – and that deserving students who have the “motivation, the skills, and the “smarts” should not be held back because of lack of money to pay for a higher education.
My proposal for education is simply this.
As a student if you can achieve a grade of 75% or more in high school – we will pay for 75% of your university or college tuition.
If you achieve a grade of 85% or more – we will pay for 100% of your college or university tuition.
Where do we get the money to do this?
Reform the banks (my first point).
Supply vs Demand.
Essentially supply is production, demand fundamentally is dictated by how much disposable income we have in our pockets at any given time.
The amount of ”disposable income” we have is directly related to what we do for a living, and how much we get paid to do that job.
To help save our economy we need educated people working; making a good wage.
To that end I believe we need to heavily invest in “green technology” and lead the revolution – put people to work with good paying jobs.
People with good paying jobs; buy cars, they buy homes, they buy products and services and they pay taxes.
I am interested in what you have to say…
I hope you write to me and discuss the merits of my thoughts and proposals or tell me why they wouldn’t work.
Do you think our banking system would collapse?
Do you think banks have proven themselves worthy of our trust with our most important asset, our money?
Do you think wall street/banks will do the right thing on it’s own without intervention?
I look forward to your comments.
Sincerely,
Kevin Boyle
“The Secrets to Sales Mastery”
Sales Trainer/Coach, Author and Public Speaker
Write to me here:
** I am not sure about in the States, but I do know that in Canada that governement can borrow money for itself at zero percent interest.
If this is not true for the States, you have to wonder why the Federal US government allowed itself in the first place to give up control of it’s money supply and then allow the Federal Reserve to charge it interest to use your money.
