How To Solve The Current Finacial Crisis Essay

How To Solve The Current Finacial Crisis Essay

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The financial crisis that is currently affecting the United States of America is the result of several factors, including the growing number of foreclosures, all of which converged into a “perfect storm” of a severe magnitude. The end result was not only the exacerbation of the already looming housing crisis, but the overall bleak outlook on America’s financial system. The integrity of the financial system was put into question along with the future of America’s economy, including its once thriving housing market. In my opinion, I think that like all crises that our great nation has faced, this too shall pass. The question is how quickly will it pass? One of the first steps that we can take toward solving the financial crisis is solving the foreclosure situation that has sprawled across our country. If we can stop the continual insolvency of our nation’s homeowners, then we may be able to reverse the vicious cycle of banks needing to seize a toxic asset, put another loss on the books, packaging this asset either in the form of a bad mortgage or an unwanted property, and putting it on the market so it can collect dust until our economy turns around and an investor purchases it. It is my belief that we can solve the foreclosure calamity by two actions; 1) creating a quasi-governmental agency that will give tax credits to banks entering into a lease-to-buy program for people who are either currently in foreclosure, or those that are about to enter foreclosure and 2) allowing the free market to eventually recoup the losses via the form of investment and spending.

The concept of a lease-to-buy option is that a tenant may rent a property with the hope of being given the first right to purchase the property at the end of the le...


... middle of paper ...


...ity where everyone chips in, everyone walks away a winner. By creating a quasi-governmental agency that will give tax breaks to banks participating in the lease-to-buy program, everyone wins. The government solves a large part of the financial crisis. The banks recoup their losses while still owning the deeds to their foreclosed homes inventory and getting tax breaks for doing it. Those in or facing foreclosure can still live in their homes while getting some extra money back in their pocket. Homeowners who acted responsibly will not face an unfair playing field by allowing those who behaved irresponsibly to go without facing some form of punishment. And lastly, the economy can once again rely on the free market to strengthen itself, which will in turn create job create jobs and help to save our nation from the overall financial crisis that it currently faces.

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