The Path to Implementation

1. The Treasury Department should use remaining tarp funds (and additional budgeted funds) to purchase or issue a firm commitment to purchase all non-performing mortgage backed assets from troubled lending institutions (those posing greatest risk to economy first) at discounted levels (30-70 % discount). These margins would provide profit and restructuring margins to offset operation and execution cost. This would provide some much need relief and liquidity to financial institutions freeing funds for business lending while relieve defaulting loan pressures.
2. Congress should swiftly pass legislation allowing American workers open and fund Individual Mortgage Accounts that offer attractive tax and lending advantages. In these, workers will be able defer up to 50% of their income tax free to purchase homes at low interest rates (.25% for prime borrowers up to 1% for sub prime). At application, citizens would provide full and complete documentation of employment (the primary qualification), credit, and savings to determine qualify rate level ; with rate reduction for completing accredited financial budget and management course. In general all working class citizens would qualify for some degree of dwelling ownership (i.e condo, co-op, single family dwelling, etc.) at some price level.
3. Initiate a second Stimulus Package that is targeted towards offsetting IMA participating worker’s salaries (NOT EQUIPTMENT OR MATERIAL PURCHASES, which can be made with other business investment capital). This program would make grant funds available to qualified participating employers to offset the salaries of workers that are participating in an IMA. This would help employers attract workers at vastly reduced employment-wage cost. This would attract jobs back onshore and simultaneously create jobs (rebuild/build-out infrastructure as it could possibly be curtailed for targeted select industries or project types), lower employer wage-cost, promote homeownership, provide tax breaks, and constructively resolve mortgage crisis. Mainly it would provide for a quick government refunding since up to 50% of granted funds would immediately be redirect as principle mortgage payments. It could also attract funds from the first stimulus making that legislation less wasteful and reducing the Federal deficit.
4. As and added incentive; offer participating employers with 50% employee participation or better an additional flat tax break of 10-15%. A plan such as this could make troubled institutions like GM, and Chrysler immediately viable and competitive.

The only possible hurdles to this plan is the speed by which it can be implented and possible displeasure from banks to losing what had become a pretty lucrative income channel. Yet given, the overwhelming popularity that a plan would carry with business and citizens and the current unpopularity that the banking image suffers, these could be easily overcome.