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Thursday, October 02, 2008

Alternative Bailout Solution - Reader Response

This analysis was provided by a good friend and reader MKinya:

They are about to pass or look like they will probably pass a bill to pay out 700 billion dollars to bailout Wall Street. While I don’t really know how much the taxpayer should take on to pay for this ordeal, I do think that there is a solution that will work out for quite a few people.
How about after the government putting up the money - however much it is - offering the general public a piece of the action on any profit to be made by the deal. This would be in the form of raising money much like the same way campaigns raise money. Tell the American people that if they want to invest in the bailout (which there may be quite a few of us out there willing to bet that this will end up being a profitable investment like most other bailouts the government has undertaken).
The idea would be that after the government spends the 700 billion dollars then they should set up a way for Joe six pack to invest ($25 -$10000). Maybe even $25 dollar stock with a maximum of $10000 investment. The investment Joe six pack gives the government would go back to the treasury and reduce the taxpayers liability in the bailout. Just like any other investment it is voluntary and there is a possibility of losing money. What this does is that the people who are willing to put up the money can then also make money out of the deal. If the investors don’t put in the whole 700 billion dollars then whatever shares are left go back to the taxpayers (They have already put up the $700 billion)

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