The headline on the Huffington Post at the moment states “Obama Planning New Fee on Banks to Recoup Bailout Costs” and this sparked the early morning firing of a neuron.  Ten minutes later, I think I’ve got a solution to the whole bank bailout issue.

This is what I propose for the banks who have not paid us back all that money we (being U.S. taxpayers) loaned them:

1. Raise the banks’ interest rates to an outrageous fee… something in the area of 23.9%.
2. Give the banks the option of either accepting this fee, paying off their entire balance, or closing their account which will then ruin their credit and preclude them from borrowing money from any entity, including U.S. taxpayers, for the next five years.
3. Should they opt to pay the interest and keep their account open, they will agree to make every payment on time.  Should they be so much as 12 hours late with a payment, their interest rate will be raised to 38.9% and they will incur a late fee.  Let’s see… assuming the average consumer credit account has something like a $1,000 balance and late fees are usually about $35 (or 3.5%), what would be appropriate for a bank that has borrowed $20,000,000,000?  A 3.5% fee would amount to $700,000,000.  This late charge of course will be added to the balance and payable, in full, in the next cycle in addition to the minimum payment.  Failure to make the complete payment of late fee combined with minimum payment will result in the charge of  an additional late fee.
4. All profits gained from interest and late fees will be distributed among all U.S. taxpayers, less a nominal fee paid to the U.S. government for brokering the whole deal for us.

And they say this stuff is hard.  Pshah.

Filed under: Angst