Bob’s Bailout Plan

There has been a lot of talk about the bailout plan in the States.  I have a plan of my own…. let’s see what you think.

Firstly, none of us really knows what the situation is.  Let’s just agree to accept what they are saying and that our financial system is on the brink of collapse.  Without a cash infusion, the banks have no money to keep the system running.  I don’t know if that is true or not, but for the purposes of doing a bailout plan, I will accept that scenario as true.

Well, the government plan is to basically buy bad debt from the banks for a total of $700B.  This takes bad debt off the books, and also infuses cash into the system, which can then prime the pump and get cash flowing again.  The taxpayers get nothing but $700B in debt, and a bunch of bad paper, which likely won’t ever be recovered.

I read that $700B amounts to $10,000 for every household in the United States.

My plan:

1. Every household is given a voucher (not cash) worth $10,000.  The voucher can only be used to pay off debts (credit card, mortgage, etc) at a bona fide financial institution.  The voucher has no cash value, except for paying off debts at a financial institution.
2. Each household uses his voucher to pay off some of their debt.
3. The banks turn the vouchers back to the government in exchange for cash.
4. Suddenly, the banks have the $700B, the taxpayers owe $700B, just like the plan that they are trying to push through now.  The difference is that the taxpayer has reduced his debt by $10,000.

For anybody who has no debt to pay off, they can sell their vouchers to others.  For example, if I am in debt, and you are not, your voucher is worthless to you for paying off debt.  I could buy your voucher from you for a discount, say $8000 and use it to pay an additional $10k against my debt.

Anyway, that is Bob’s plan.  I believe that it accomplishes exactly what is being aimed at now, but in addition gives relief to the taxpayers too.

What do you think?  It seems too simple that nobody else has thought of it.

About the Author:  Bob Martin is an American who has been living in the Philippines since the turn of the 21st Century. Bob is an Internet Entrepreneur, and earns 100% of his income online. Bob earns through a number of different methods including e-commerce, Advertising, Informational Products and others.