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What To Do with the Toxic Bank Assets – Give Them for Free to Citizens

Let’s say that the trillion or so of toxic assets would face two choices – go bankrupt or be offered for free to willing persons. What should the U.S. government do?
Some other blogs said that they should be given to the bank executives, instead of their salaries. Nice try. But they know how to do with them, and they would squeeze more money out of the government big pockets, in the form of another smart bailout plan.
No, we at don’t like the idea. But what if we would start another system of getting rid of those assets?
What do the banks do when their creditors fail to pay the loans? They seize their mortgages and then do auctions on the market with the properties. They try to get back the money – or what was left from them.
What is the U.S. government would do the same with those toxic bank assets? (toxic probably for the tax payers, who have to support them instead of building new schools). After all, the auctioning is a well tested method by the banks.
Imagine a bog auction issued by the government where big parts of AIG or Citibank would be put on the market. I would not mind even if those auctions would be done on the internet. You paid with your tax money the bailouts of the banks? Well, why don’t you then bid for their assets?
Auctioning would solve two things. First of all, auctioning would get rid of the banks assets and would leave them free of their troubles. Unless the assets represent the whole bank, in which case you, lucky U.S. citizen, might own your private bank! Isn’t this cool?
Secondly, this is a free market. If the auctioning for the investment arm of Citibank would start from $1 and raise in increments of $10 (which is probably pretty realistic after all the mess the banks created), you could buy a bank asset for several hundreds of dollars. Boy, imagine yourself running an investment company for a couple of days, before you are forced into bankruptcy? Wouldn’t it be fun, to whip all those fatty bankers when they come into the office? I could even do a reality show, something like “Big Banker…Crying” or “Little Bankers Facing the Big Oprah”.
But enough with dreaming, there are big lobbies at stake with those “valuable” bank assets. And I can imagine that the economy would go to drain if we, citizens, would take over the banks… or maybe not?
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