Dear President Obama,

I have a simple idea that would put money directly into the hands of some of the people who could use it the most.

I live in California.  It is not uncommon for me to be somewhere on the streets in the San Francisco Bay Area and to hear the conversations of people who have just lost their job, their home, their healthcare – essentially, all that they had worked so hard for.  You hear these all the time, I know.

I see lone women living in parked cars in public areas.  A few years ago when I traveled to India and saw the poverty, I remember thinking to myself, “There but for the grace of God or an accident of birth go I.”  And now my empathy and compassion deepens even further as I see this suffering coming to our own country in unthinkable proportions.

I live in an area where the unemployment was already at 15.5% in April 2009 – I’ve recently heard it’s over 25% in my neighborhood.  I’ve read many stories of people who have just given up hope – I see it in their faces as I walk down the streets.  What I see is more desperation, more homelessness and more resignation.  Yes, stimulus is coming, but it has to trickle down through the corporations that have put us in this stranglehold to begin with.

In my view, this whole meltdown began as a debt crisis.  Credit was being given out hand over fist and foisted on everyone.  Yes, it was not wise to accept what could not be repaid, but as we are painfully aware, far too many people did just that.  The American Consumer just filled up on debt never thinking that a growth cycle may turn to a contraction cycle. 

And now, when so much Federal money has been directed to credit markets to ease this credit crisis, the credit rules are so stringent that many businesses have no access to money.  One local green builder just went out of business because though they had plenty of work, none of the projects could get bank loans.

It seems to be that certain industries charge fees that have no substantive relationship to the services provided.  Yes, some new credit card regulations were recently passed, but did you know that one of their latest schemes around the legislation is to say the credit card has been compromised by fraud, reissue a new card and then begin charging a 25% interest rate even though the old card had a much lower rate?  When did bank fees become profit centers to the banks and an ever-larger drain on the American pocketbook?  The problem with all of this is that the people who can least afford it are those who are charged the highest fees.

I have digressed.  These are larger issues than I believe I can solve here.

Right now, here’s how we could really make a difference to some of the people who really need help:

Create a temporary waiver of the penalty for the early withdrawal of retirement funds.  Further,  apply it retroactively to the point at which this crisis began.  This will give back money to the people who have already had to raid their savings.  This way, they receive all the money that was theirs to begin with.  For those who’ve already paid the tax, give them an immediate refundable credit.

Mr. President, I would submit to you that these are extraordinary times.  I agree with you that we don’t want people to cannibalize their retirement savings, but for many people, this has been their only option to survive.  If an individual has been brought to the point of desperation and forced to cash in their 401K (or other retirement accounts) – shouldn’t we waive this penalty in these most difficult of times? Do we really want the United States Government to benefit from this most desperate act?

With all that we have given to the corporations, can we not do something for the common man and woman in America?  It is my belief that this would be a stimulus package that would truly help some of those who need it most.