The recently passed financial bailout was never intended to accomplish any goal except to provide financial assistance to those who least need it, at the cost of those who can least afford it. I propose a solution that provides help to the individuals in need while at the same time benefiting those in greed.

First, the issue that requires immediate attention is to provide daily operating capital for ongoing businesses. The federal government should provide some level of loan guarantee (as a catastrophic reinsurer) in the credit market for daily operating capital.

Second, the government would provide mortgage refinancing to troubled homeowners, at a reasonable fixed interest rate with terms as long as 99 years, depending on the need of the individual situation.

The impact of lowering the interest rate and extending the mortgage term would significantly reduce the monthly payment and change a troubled mortgage into a solid performing asset. This would redeem and thus eliminate the worthless mortgage-based derivatives and provide new pools of performing mortgage-backed securities. The mortgage term could then be reduced by making optional advanced principal payments.

David Saldana, Durham

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