I have an idea regarding the credit crunch

[whosinpower]

And it is not complicated at all. Instead of the Government buying up crappy assets from troubled banks.......use that 700billion as a fund and loan the money directly to mainstreet - to enable the day to day workings of the economy.

So - as one Duer posted, he could not get a short term loan to make his payroll - with a plan like this in place - he would go to the government for the money - and pay it back with interest - just as he would any bank.

If the banks cannot or are not willing to loan money to each other because of all the crap - then do a bypass and function without them. Confidence will be somewhat restored that the day to day functioning of the US economy is stable and the banks can then go through the mess - and write off the bad debt - cut their losses and get on with the business of banking.

[MercutioATC]

1. Financial institutions are causing this problem...and throwing money at them won't help.

When the government opened its discount window to a wider variety of institutions and lent money at ridiculously low rates a couple of months ago, the purpose was to maintain credit liquidity. What did the banks do?

They didn't use the money to lend to customers, they bought Treasuries.

Yes, they borrowed money from the government that was intended to maintain liquidity and instead of lending it, they sold it back to the government at a profit.

So you're right, you can't ease the credit crunch by making money available to banks. You CAN help the problem by making money available to individuals.

[jtrockville]

2. GMTA ;)

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4091433&mesg_id=4091565
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4112965&mesg_id=4119601
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4125505&mesg_id=4125645
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4132446&mesg_id=4132498

[whosinpower]

3. Sorry

And here I thought I was being original....apologies for the dupe.

[jtrockville]

4. No, no need to apologize....

I'm glad we arrived at the same place independently.

[cat1985]

5. Congress Plan Falls Through

not a bad idea really, but still a shame a simialr plan fell through in congress