The public angst over the $700 billion bailout of Wall Street firms has raised an outcry from the American people that is in stark contrast to most government actions. The players involved include a Republican president who has pitched a program that the Democratic Congress has run with that is opposed by Republicans. It is also opposed by many unions who normally support Democrats. At the same time the speaker of the House, Nancy Pelosi is seeking enough Republican support to "cover" the legislation. Since there are already enough pundits to comment on that subject I'll leave it alone.

Many Americans object to the bailout because it seems that Wall Street executives are getting a pass due to the market fluctuation in interest rates that adversely affected those with adjustable rate mortgages and those who, because of credit history, income and even ethnic origin were saddled with higher interest rates.

This led to some initial foreclosures and as interest rates went up, the demand for housing went down, but additional foreclosures led to additional supply of housing. No matter what stand you take on economics, if the supply is going up without a corresponding increase in demand, prices are likely to go down. This happened with housing and now many people owe more than their house is worth.

This is where the bailout needs to happen! With the government now controlling Fannie Mae and Freddy Mac it would be possible to bail out individual homeowners who are facing foreclosure or have had major disruption in their financial situation due to unemployment. The government could do this with agencies such as Housing and Urban Development and the Federal Housing Administration and could thereby provide a restructured mortgage. The $700 billion (some have estimated $1 trillion) could provide mortgage refinance assistance to 7 million homeowners if the average assistance were $100,000.

So how would this work? Suppose a homeowner was entering foreclosure and owed $500,000 on his house that was now worth $400,000. The government would pay the note and provide the homeowner with a $400,000 mortgage at 5 percent. This would lower payments and give the homeowner a means to stay in his or her home. The government would then have a $100,000 stake in the house and once the market recovered the homeowner might then sell the house for $600,000. At this point, the government would recoup the $100,000 plus a percentage of the amount over the original government refinance amount. If 10 percent were used, in this example the homeowner would pay $10,000 of the profit.

The government would also be able to increase revenue in other ways. They would be collecting the 5 percent interest plus, with the reduced amount of mortgage interest being deducted, the government would collect more in taxes. The program would, in many ways fund itself and provide a means to see a payoff because few mortgages would see a full 30-year payoff.

Doing the bailout in this fashion would get to the root of the problem and get homeowners out from behind the mortgage rate eight ball.

This would mean politicians would really have to put country first instead of the corporate lobbyists. Of course that is as likely as getting the financial giants to deconstruct the mortgage-backed securities so that the government and the rest of the world could know what they are buying instead of a pig in the poke.

Warren Buffet was smart enough to stay away from such things over five years ago, isn't it time we learned the lesson he saw ahead of time?

MARK BUTLER lives in North Attleboro.