Heard a Brilliant Idea on NPR regarding bailing out of Banks ...

[TheCoxwain]

The Idea was to give banks vouchers instead of real money - vouchers that can only be used to make loans to consumers and businesses ... they will be like food stamps that can only be used for one purpose -- bankers cant pad their salaries or go on junkets ....

The banks will have to use the vouchers as they see fit -- and the Government wont be directly in the banking business and no one will be accusing it of 'Nationalization or Socialism...


I cant see anything wrong with this idea? Can you geniuses point to some flaws with this approach?

[T Wolf]

1. Any funds given to banks would allow them to divert other dollars from the stated purpose

(lending) to whatever they want.

This is the same weakness as the faith-based bullshit. Churches took the money from the feds and used "it" for outreach, aid, whatever. The moneythat they would have spent on thse activities now could be funneled to conversion attempts, etc.

There really are not "separate pockets" in the same suit.

[Aloha Spirit]

3. Well put

This is what I thought of too!

[Mugweed]

2. The contract for printing vouchers goes to KBR?

It sounds like a good idea, the vouchers - not my lame joke in the subject.

[DJ13]

4. It would be better to give the vouchers to the public to pay off debt

That would eliminate some consumer debt, and the banks will end up with the stimulus money in the end.

[lapfog_1]

5. Better would be for the government to simply take

over ALL mortgages, at 5.25%, refi done to the 80% of the loan face value for a fixed 30 years.

And credit cards too, at 8.5%, but the credit limit is the current balance.

People can choose to go to the new government backed mortgages and credit cards or stay with their banks. Banks are then out of the consumer credit lending business and can only make new loans to other
banks or commercial ventures. No bank will be allowed to operate in more than, say, 5 states.