How about this for a new law...

I just read about a wealthy man who stopped making payments on his house. He is upside-down in his mortgage, so he simply stopped making payments and is living cost-free in the house until the bank forecloses. That's a minimum of 6 months, probably more like two years because of the foreclosure backlog.

Meanwhile, the US Taxpayer is bailing out his bank.

That means a wealthy man who can afford the monthly payments is taking money out of our pockets to pay for a very nice house. Somehow seems wrong, doesn't it?

When the bank loans me money, their first collateral is my good name. They know I will pay the payments in a timely manner because I have a good credit score and I have some integrity. I don't just bail on a loan and let other people pay my debts. The secondary collateral is the house, because if they were wrong about my good name, there is still something of value that they can take and redeem to protect their other investors, and the taxpayer who is the ultimate fail-safe for the bankers.

I'd like to propose a new law that makes it a federal crime for a person or corporation to stop making payments on a taxpayer-insured loan when the borrower can clearly afford to make the payments. Since the risk has been spread to all tax payers, robbing from all tax payers by failing to make an affordable payment is tantamount to theft by swindle, and should be punishable as such.

"Taxpayer insured loans" include anything handled by Fannie Mae or Freddie Mac, or insured by AIG, or made through any other bank that received TARP funds, or any other loan that ultimately will hurt the taxpayers if there is a default.

For punishment, I would suggest 25 years in prison (adjusted for the remaining term on the loan), and confiscation of all unencumbered personal property. Sell the personal property at auction to help settle the mortgage debt. Since the debtor will be in prison for the foreseeable future, they won't need that big-screen TV anyhow.

For corporations defaulting on such debts (and they do it with distressing regularity), the government should dismantle and disband that corporation and jail it's board of directors and every executive above the level where the decision to screw the taxpayers was made. Put some teeth in the law; too long the rich and the powerful have stolen from the masses using the law and the government as a stooge. Oh, that hurts the other employees and the investors? Yes. The investors took an educated risk when they loaned money to the company. The employees will be sold along with the division that they worked for.

Think what this threat will do to corporate culture. Suddenly the middle manager who proposes screwing the bank or the taxpayer is a pariah, rather than a hero. Integrity will increase. There will be a personal motivation for every employee and every stockholder to encourage corporate ethics. How is this a bad thing?

Perhaps I am too harsh on people who default on their loans when they can make the payments. After all, it's not their fault that the housing market plummeted, right? No, it is not. But it's not my fault that my son had an emergency appendectomy last year... but I still had to cough up the three thousand dollars that my insurance did not cover. It's not my fault that Haiti had an earthquake, but my tax dollars and my personal charity are going there. It's not my fault that Katrina hit New Orleans, but I got to help pay for that mess, too.

Being responsible and grown up means that you get to pay for things that were not your fault. That's how we are; we spread the risk. I don't mind paying to help after natural disasters. I don't mind paying for the guy who cannot get a job. What I have a problem with is paying for the mortgage of the person who has the financial resources to pay, and who promised to pay, but then changed his mind while he could still afford the payments.

My hope in asking for this law is that it will never need to be enforced; that the threat of consequences will deter people and corporations from demanding that all of us taxpayers foot the bill for their greed and foolishness. I may be a little naive here; perhaps there are people who are willing to risk it all to screw the rest of us. For those people, perhaps the Department of Homeland Security should be involved.

Who is with me on this?