With rumors starting to swirl about a new economic stimulus package, I would like to put forth an idea: HOW ABOUT DOING SOMETHING FOR ME!

Okay, now that I got that out of my system, here’s the deal: There are two categories of people with mortgages out there:

Category I

These people have:

1. Lived in their houses for a number of years.
2. Have never, or rarely, missed a mortgage payment.
3. Have good to excellent credit.
4. Are not in over their heads.
5. Played by the rules (you know, back when Payment+Interest+Taxes+Insurance could not be more than 28% – 30% of the applicant’s GROSS monthly income).

These are not the people you chose to help in the first stimulus, even though they are the people you are going to tax to death to pay for the stimulus. Instead, you chose to help the people in:

Category II

These are people who:

1. Had not lived in their houses very long.
2. Couldn’t make their payments.
3. Had a wide ranging quality of credit, apparently much of it very bad.
4. Were in over their heads.
5. Played by whatever rules suited them in order for them to get into the house they wanted.

Now consider this:

1. If you buy down or pay off a Category I mortgage, that’s money that goes straight into the Category I person’s pocket, because their mortgage payment comes straight out of their pocket.
2. By paying down or paying off the mortgages of the folks in Category I, the money goes straight to the banks and is easily trackable, because it is going to pay down or pay off legitimate commercial paper that actually has value, instead of going down a rat hole to pay off some pieces of valueless commercial paper.
3. The Category I winds up either owning or mostly owning their home, making the dream of true free-and-clear home ownership either a reachable possibility or a flat out reality. This makes for millions of happy campers in November, 2012.
4. Pay down or pay off Category I mortgages and the money saved by those folks goes straight into their pockets, with a lot of it flowing right back out into the economy for things like new cars, clothes, TVs, home improvements, etc.
5. Net/net: Everybody gets well.
6. Paying down or paying off the Category II mortgages gets you nothing, because the people in this category don’t have any money to spend. Even if you pay down or pay off their mortgages, they won’t have any money to spend, because they didn’t have the money to make their mortgage payments in the first place. Many of them also have histories of poor money management, and all of this translates into no new cars, clothes, TVs, or anything else.
7. Net/net: Nobody gets well.

Mr. President, I’m not an economist and don’t play one on TV. But, if you’re going to tax the daylights out of me to bail out Category II folks, you better hope they turn out in force at the polls in November, 2012. Because I and all of the other Category I folks are not going to be happy campers at all.

© 2009, Mac Williams. All rights reserved.

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• By willywilliams, July 9, 2009 @ 16:35

  I am a Category 1 but I feel like I have been hit by a Category IV hurricane. I’m paying my mortgage, sending my kids to college mostly out of pocket, paying my taxes, living by the rules. BROTHER CAN YA SPARE A DIME? I like this idea, a little somthing for the workerbees.

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