Former FDIC Chairman Sheila Bair has written an Op-Ed published in the Washington Post this weekend with THE SOLUTION TO THE MORTGAGE CRISIS & INCOME INEQUALITY!

Bair’s brilliant solution?  $10 million 0% loans from the Fed for every American.
Bair’s recommendations for how 300 million Americans should each use their free $10 million?  Conservative Americans could buy 10 year treasury bonds at 2%‘, and ‘the more adventuresome could buy the new Greek 10 year at 21% for an annual income of $2.1 million‘.

Yes Sheila, surely 300+ million Americans would all spend $10 million in free cash on bond issues, and not on purchasing gasoline, Cameros, Bud Light, Camels, diapers, and toilet paper.

Actually, we would love to see Bair’s plan implemented for purely selfish reasons as physical gold and silver would instantly skyrocket against goods and services thanks to the overnight hyperinflation.

Fix Income Ineqaulity with $10 Million Loans for Everyone!
By Sheila Bair, Former FDIC Chairman

Are you concerned about growing income inequality in America? Are you resentful of all that wealth concentrated in the 1 percent? I’ve got the perfect solution, a modest proposal that involves just a small adjustment in the Federal Reserve’s easy monetary policy. Best of all, it will mean that none of us have to work for a living anymore.

For several years now, the Fed has been making money available to the financial sector at near-zero interest rates. Big banks and hedge funds, among others, have taken this cheap money and invested it in securities with high yields. This type of profit-making, called the “carry trade,” has been enormously profitable for them.

So why not let everyone participate?

Under my plan, each American household could borrow $10 million from the Fed at zero interest. The more conservative among us can take that money and buy 10-year Treasury bonds. At the current 2 percent annual interest rate, we can pocket a nice $200,000 a year to live on. The more adventuresome can buy 10-year Greek debt at 21 percent, for an annual income of $2.1 million. Or if Greece is a little too risky for you, go with Portugal, at about 12 percent, or $1.2 million dollars a year. (No sense in getting greedy.)

Think of what we can do with all that money. We can pay off our underwater mortgages and replenish our retirement accounts without spending one day schlepping into the office. With a few quick keystrokes, we’ll be golden for the next 10 years.

Of course, we will have to persuade Congress to pass a law authorizing all this Fed lending, but that shouldn’t be hard. Congress is really good at spending money, so long as lawmakers don’t have to come up with a way to pay for it. Just look at the way the Democrats agreed to extend the Bush tax cuts if the Republicans agreed to cut Social Security taxes and extend unemployment benefits. Who says bipartisanship is dead?

And while that deal blew bigger holes in the deficit, my proposal won’t cost taxpayers anything because the Fed is just going to print the money. All we need is about $1,200 trillion, or $10 million for 120 million households. We will all cross our hearts and promise to pay the money back in full after 10 years so the Fed won’t lose any dough. It can hold our Portuguese debt as collateral just to make sure.

Because we will be making money in basically the same way as hedge fund managers, we should have to pay only 15 percent in taxes, just like they do. And since we will be earning money through investments, not work, we won’t have to pay Social Security taxes or Medicare premiums. That means no more money will go into these programs, but so what? No one will need them anymore, with all the cash we’ll be raking in thanks to our cheap loans from the Fed.

Come to think of it, by getting rid of work, we can eliminate a lot of government programs. For instance, who needs unemployment benefits and job retraining when everyone has joined the investor class? And forget the trade deficit. Heck, we want those foreign workers to keep providing us with goods and services.

We can stop worrying about education, too. Who needs to understand the value of pi or the history of civilization when all you have to do to make a living is order up a few trades? Let the kids stay home with us. They can play video games while we pop bonbons and watch the soaps and talk shows. The liberals will love this plan because it reduces income inequality; the conservatives will love it because it promotes family time.

I’m really excited! This is the best American financial innovation since liar loans and pick-a-payment mortgages. I can’t wait to get my super PAC started to help candidates who support this important cause. I think I will call my proposal the “Get Rid of Employment and Education Directive.”

Some may worry about inflation and long-term stability under my proposal. I say they lack faith in our country. So what if it cost 50 billion marks to mail a letter when the German central bank tried printing money to pay idle workers in 1923?

That couldn’t happen here. This is America. Why should hedge funds and big financial institutions get all the goodies?

Look out 1 percent, here we come.

[email protected]

Sheila Bair is a former chairman of the Federal Deposit Insurance Corp. and a regular contributor to Fortune Magazine.



    they had done something similar to this 4 years ago they could have done this much cheaper

    but no they pimped out the bankers instead of bailing out the taxpayers

    typical Harrrvard or Princcccccceton educated fool thinking

    someone PLEASE wake me when this circus comes to town

    because I love a parade LMAOOOOOOOOOO

  2. I think this douchebag is serious.  She headed up the FDIC.  That place is nothing but a Ponzi scheme insurance agency set up to protect us from stupid bankers.  See how well that worked out.  She’d pimp out every person in America to the Fed with $10 million and sell our souls to the devil if she could get away with it.  She is a complete and total fraud and farce.  Put her on the emenies list

  3. It’s a bit late for her sort of suggestion.  But back in 2007, it actually wouldn’t have taken anywhere near that sort of money per American to “fix” things.  A simple $150,000 injection to every adult and $10,000 per kid would have likely been just enough inflation to prevent the housing market from turning over and creating negative equity, which in turn made the sub-prime loans go bad and if you all recall, the first stage of the credit crisis hit the sub-prime loans, and then, the alt-a loans.  From there, the Fed could have raised interest rates, forced a recession and sobriety, and there might have been a chance to start the process of moving the credit system out of danger.

    Don’t misunderstand.  I don’t like what I’m writing, and the scale of the program she’s pontificating about is just nuts.  But I’m reasonably certain that a much smaller program very early on would have been better than just dumping 7+ trillion into the banking system (what has happened to-date in the US, with still more to come).  At least with the money bomb it would have been more equitably transferred to everyone rather than just bankers.  The banks would have had their bailout through the back door because the assets that went bad wouldn’t have gone bad in nominal terms.  Meanwhile, the inflation in the system would be democratically distributed and smart people like Doc would have moved his money into bullion.

    For the most part, my economic thinking aligns with the Austrian School of economics.  So, this entire discussion just makes me sick. If I were king I would have never let the Western world depart from an investment-savings driven system to a credit-consumer driven lunatic fiat fiesta.  But given that the mess was 40+ years in the making by the time 2007 came around, the general logic of a direct money transfer to the populous is actually not as crazy as it might seem at first blush.  It probably would have worked better back in 2007 than what we are seeing today.

  4. Bair is obviously having a tongue in cheek go at Fed who lent money for free to the Banksters and then paid them interest for depositing it back at the Fed. What a crony operation – why could the Fed not have given the same loans spread over 120 million US households instead of a handful of TBTF Banks?

    Bair’s article is cleverly thought out and presented, as it shows clearly what a hypocritical setup exists between rich Bankers and the Politicians, who scratch each others backs at the expense of 99% of American citizens. But, with respect, I must say that the 99% deserve what they get because they keep voting the same crooks into power. Living in South Africa, I watch with disbelief when politicians are deemed “Presidential” because they read well off a prompter or are good looking (physical appearance is all important).

    We are no better off in South Africa where our President is adored because he dances and sings at political rallies – never mind that 400 odd charges of corruption against him were withdrawn in odd circumstances just prior to our last elections.

    Politicians worldwide are dirty, and likewise their crony friends in big business. No wonder they hate gold and silver which doesn’t live in bank accounts where it can get followed and taxed to death. Stuff the lot of them.

  5. I think they have “put them on the bench”. Jail time coming. I’d like to see that here but then, “the world depends on the dollar” (But not much longer). So they’ll get by with it. Bummer.

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