Tel Aviv Beach in Storm

Half a million people have lost their jobs in the past month in the US of A. 600,000 have stopped looking for work entirely. These are official figures and you can bet the real totals are much higher.

The smart men and women in Washington can’t seem to figure out what to do. $150 billion for AIG, $300 billion (promised anyway) for Citibank, $700 billion for a bailout package and none of it is having the desired impact.

Let’s do some math. What is a trillion dollars? In this case, 1.15 trillion dollars…so far. Well, let’s say that instead of giving this money to banks and failed insurance companies, the US government distributed $1.15 trillion to citizens who owe more than 75% of their property value as well as those who are proven to be behind or close to failure in making mortgage payments. Let’s say that we would give each of these families a $50,000 loan to be repaid withing 30 years at 5% per year. Twenty families is $1 million. A thousand million in a billion so that gives us 20,000 families. Times 1150. That’s 23,000,000 families. Twenty three million families. Let’s halve the $50,000 and distribute it to 46 million families. How many households are there in the US, about 100 million? So one quarter to a half of the households receive a loan.

Want to bet that will resolve the housing bust and drive a fortune into the economy immediately? Want to be that this is a better solution than giving the money to bankers who are sitting on it and who failed miserably in their jobs in the first place? This would be a loan to these households, so even taking welchers into account, the US would stand to earn 5% interest on a trillion dollars for 30 years. That’s $50 billion per year. Not shabby at all.

Instead, this money was given to financial firms that are sitting on it even as critical time is passing. All this money pissed away while Rome is burning. The answer is right there in front of their eyes but ideology and an inability to decide how to distribute the funds to individuals means that this idea was aborted before conception.

The photo is by Gilad Benari who is a talented photographer with an interesting eye.

Shabbat shalom!

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