As a form of prevention, I would create a new system of purchasing a home loan from a bank. An individual’s credit score would be based upon earned income only. Collateral would not be allowed. This would direct first time home buyers to get a loan for a house they could afford and prevent false representation of wealth. Misrepresentation of wealth was a huge factor in the fall of the economy. A person would put down false collateral, such as another house or multiple houses, in order to gain another loan. When values fell, their inability to sell the properties caused the collapse.
Another preventative measure would be to reduce the size of new homes being constructed. Families of three do not need six bedroom houses. They need an affordable roof over their heads. The Government could reward construction companies that built smaller, more affordable homes with tax reductions, or benefits. The smaller units can be constructed using fewer materials, and should involve less labor, making the home’s final cost more reasonable. This would spark real estate sales, which would stimu...
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It is very challenging trying to dig our nation out of debt. Money has to come from somewhere, and when taken from one place, it needs to be replenished, before dipping back in the piggy bank. There may not be an easy way to fix this economic crisis, but there is a wrong way. Masking and covering up the debt with more debt is not going to replenish the money flow. Dispersing the debt helps, and it can give the economy more time to replenish its resources, before all the “I owe yous” are due. I strongly believe that this three step plan will work. In addition to being effective, it also puts more power into the hands of American Citizens, the banks and the Government, by sharing the responsibility and conquering this debt. No more pointing the finger, or placing blame. Not everyone caused this crisis, but we are all in this together.
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