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View Diary: Taibbi: My Advice to WS Protestors w/update on picture (157 comments)

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  •  Obscene mortgages, student debt and credit cards (13+ / 0-)

    Blame these on the bankers. We just went through two decades where bankers invented the "safe" investment for the 1%, that is, your debt. It should never have happened and they are the villains. The right solution is to force a partial debt holiday and get the bankers and their clients and investors to pay. A partial debt holiday does exactly that. All mortgages should have their principles clipped at three times the annual income of the owner's averaged previous years' income. Student debt should be reduced to one-half times the annual income of the debt holder.  Credit cards balances should be clipped at one-quarter times previous years' income. The loss of principle for those who supplied the capital for this massive rip-off would be allocated according to the adjustments of debt.

    This would be a reasonable demand to fix the mess that greedy bankers created, force losses for the guilty and get our economy going again. Can you imagine the level of consumer spending after debt relief? The housing market would recover, along with durable goods, and non-durable goods and jobs.

    This is what I would suggest as the ultimate demand for #OWS.

    •  Student debt is a racket. (11+ / 0-)

      Once they started student loans, the debt exploded.   Schools, particularly private, took everyone and started jacking up tuitions.  What did it matter to them?   They were guaranteed - no defaults.

      Yes we can, but he won't.

      by dkmich on Thu Oct 13, 2011 at 05:42:37 AM PDT

      [ Parent ]

      •  Worst idea in the world (1+ / 0-)
        Recommended by:
        dkmich

        Trying to make something/anything default proof.  The reason why the repo market has exploded and eats up so many dollars out there right now is that it is also somewhat "default proof".  If an entity goes bankrupt their repos have to be paid first, accounts are frozen to all other creditors except those holding their repos.  So repos are the safest investment now, safer than anything else out there under such market distorting laws.  It leaves corporations with the incentive to become asset depleted gutted worthless shells as well.

    •  Aren't your numbers kind of high? A mortgage 3x (1+ / 0-)
      Recommended by:
      dkmich

      annual salary? In my case that would be more than double my current mortgage. And if you have credit card debt that equals a quarter of your income you're irresponsible.

      Not to defend banks, but your solution is weak. Think of it -- if you make 60,000 a year your credit card debt should be cut to $15,000? I would ask why it's that high to begin with.

      •  If you're living off your credit card, and (2+ / 0-)
        Recommended by:
        The Wizard, ocular sinister

        only able to make minimum payment, 9 months could get you there without much trouble.  

        Yes we can, but he won't.

        by dkmich on Thu Oct 13, 2011 at 07:29:59 AM PDT

        [ Parent ]

      •  It's not a giveaway, it's a correction for excess (2+ / 0-)
        Recommended by:
        dkmich, ocular sinister

        The median family income in the US is $50,000. That would clip mortgages to $150,000, student loans to $25,000 and credit card debt to $12,000. These numbers should be sustainable. For instance it would mean a monthly payment of around $1000 for mortgage and taxes for a typical family with current rates. This should be sustainable.

        The problem was that too much money drove housing prices to double historic values. In my area that was $300,000 for a small house, and a mortgage of almost that amount. The problem now is that that payment in not sustainable. Since the bankers had a hand in this in many different ways, from MBSs, to CDSs, to writing liar's mortgages, etc. that the bankers and their investors should pay the price, not the people.

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