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This is going to sound ridiculously simplistic but I think it can work.

1. Real Estate Bubble

There’s a very simple reason why real estate bubbles even form in the first place: speculation. If you’re a real estate investor, it sorta makese sense because at least your in the industry. In the previous bubble, people were buying homes as if they were going to make a profit on it while living in it. I don’t know about you, but when I buy my OWN home, my intent is to LIVE in it, not to speculate on it.

By the way, your home is NOT an investment. We can get into very philosophical definition of what an investment is, but that would take days. Look at wikipedia’s definition of what an investment is: 

Investment is the choice by the individual to risk his savings with the hope of gain. Rather than store the good produced, or its money equivalent, the investor chooses to use that good either to create a durable consumer or producer good, or to lend the original saved good to another in exchange for either interest or a share of the profits.

What’s the PRIMARY reason people buy homes? So they don’t have to sleep in cardboard boxes and wake up to someone peeing on your face! It’s a roof over your head, not something you “invest in”. It’s a freakin’ liability, not an asset. Well, that’s not true, it is an asset, just not yours. It’s the banks.

Yes, there were a lot of “investors” and flippers who were speculating and helping to push the bubble further along, but they represent such a small percentage of the people. There’s no way this bubble grew to how big it was w/o the intervention of primary home owners.

So I say we do this : if your primary home is sold within 5 years of purchase, unless you move up into another property, your capital gains is taxed at 90%. Yes this raises a whole slew of “what if’s”…. I say, bring it on. Tell me what these are in the comments.

2. National debt

People think US borrowing is a totally bad thing. Well, I think this can be good.
Other countries are willing to lend money to Uncle Sam @ 5-6%. Instead of blowing this on stupid wasteful things like military expansion, more social security benefits, pensions, etc… why not take this money and buy performing paper notes that produce 10-20% return? i.e… Do what the BANKS do. Yes, this is the federal reserve bank, but they don’t do anything with profit motive in mind. They just care about regulating banks that borrow from them.

Let this new “federal bank” buy PERFORMING credit card loans, auto loans, business loans, etc. Get a yield spread of 8-15%. Heck even give these people a break and cut 2-3 points for and still get a spread of 3-12%.

Yes yes, this bring up another slew of “but” and “if”. Hey, nothing is perfect and the financial system already sucks. Why not suck less.