The government is betting that by lending large amounts to private investors to purchase securities, markets will revive and security values will rise. It is a costly and risky venture, I hope it works, but fear it won’t. This article proposes another approach to the same objectives that would cost the government nothing. I call it "desecuritization." All it requires is the appropriate enabling legislation.

Desecuritization means reversing the securitization process. Securitization converts large numbers of individual loans into security issues. Desecuritization converts the securities back into individual loans. The objective of both is the same: to enhance value.

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