One domino

Let's make an imaginary household budget, in these difficult times. The keeper o' the bills has some money in the bank, but knows there's this bill sitting in the in-box waiting for payment. It's a really big bill. But that bill payer knows there there has to be some cash kept in hand to simply keep the household surviving. So that payer doesn't try to improve his family's situation, he or she simply does the basic necessity and keeps a wary eye on that pending bill. It's a fiscal stalemate.

That's kind of how I've viewed the American economy for several months. Especially post the banking industry "bailout" that was first executed at the end of last year.

Billions of dollars went into the system and everyone screamed "but where?" They sure weren't seeing it available for car, home or small business loans, cornerstones of our economy. It was kneejerk to cry that it was simply doled out to more executives, although the millions that might have gone in that direction were a drop in the bucket compared to the billions supplied.

I felt the truth was, the banks were sitting on a good portion of that money looking into their own ledger books at billions of dollars in real estate loans that were far more than the value of the real estate which was collateral.

It goes beyond tax or bailout or federal loans or whatever you want to call the dollars. Top government officials and economists have said the true sign of recovery is when PRIVATE money starts flowing around. Yes, there are still billionares and, much more importantly, many multimillionares out there. But you haven't seen them making business moves.

I think it's because capitalism still exists. Those moneyed - albeit less moneyed - people are waiting for opportunity. And best opportunity may reside in those real estate loans. They've seen it before.

Here's the scenario: The federal government joins with the banks to put up funds less than the loan totals to dump those upside down loans into one bucket. The banks take a loss, the government absorbs a debt, but they get off the banks' books. They then look for buyers for those properties at a discounted price. Private consortiums have already been formed to make such purchases, they just haven't had the store open yet. The private buyers make those lands available to other buyers - developers and homebuilders - at prices that make sense with the current value of those properties. The first buyers can do such as they bought at a discounted rate. With those dirty loans off their books, banks feel safer making base loans - small business, cars and homes. Commerce begins, from the federal money flowing through more solid banks to CREDIT-WORTHY small businesses and consumers who actually make payments, but more importantly from the private enterprise of those waiting private investors and their customers. Yes, we take a hit at the federal government level from those discounts, but this is the true trickle down economics, setting the table properly so movement can begin and create a much grander scale.

Some call those waiting for the distressed properties vultures. I'd call them the restart to our economy, the next generation of entrepreneurs. More simplier, I'd call them the first domino to fall in getting a waterfall of positive action.