I had an interesting discussion over a post-golf dinner the other night -- interesting in a nerdy, accounting sort of way. It was about toxic assets, a subject much in the news recently.

I vaguely remembered from my one accounting class and years of dealing with balance sheets that an asset is supposed to be good, or at least to have value.

In fact, my handy Oxford English Dictionary defines asset as "a useful or valuable thing." So the question arose at dinner: What, exactly, is a toxic asset? It seems to be an oxymoron.

We considered this term in the context of dinner. Suppose I am served a strip steak with a big lump of gristle on the end. I have to pay for it, but I'm not going to eat the gristle. It is a toxic asset.

Suppose further that my companion is served a 16-ounce slab of prime rib. He can eat only 12 ounces, but again, must pay for it all.

What is the extra 4 ounces? We decided to call it a beneficial liability, a term with which Washington should familiarize itself.

Now, a dog-food manufacturer might pay something for the gristle, but probably not much.

I, on the other hand, would pay a good deal for the extra 4 ounces of prime rib, because I'm still hungry. I ask you, wherein lies the greater value?

We then applied this logic to accounting methods. It seemed that all the toxic assets out there in the economy ought to have offsetting liabilities somewhere, but we had seen no discussion of them. Obviously, no one but us had utilized the concept of beneficial liability. It was sort of like realizing for the first time that negative matter must exist in the universe.

Then we ran some numbers.

Suppose you have a $200,000 mortgage on a home now worth $150,000. Your lender holds an asset with a face value of $200,000, and a market value of $150,000.

While $150,000 is certainly not nothing, it is not $200,000 either. Your lender, therefore, holds a $50,000 toxic asset.

You, on the other hand, have a $150,000 conventional liability -- and a $50,000 beneficial liability.

The government comes along with something called the Troubled Asset Relief Program, or TARP. The name was changed from "toxic" to "troubled" because "toxic" sounds so, well, toxic.

This program proposes to bundle up those troubled assets, just like Fannie and Freddie bundled up the original mortgages, and sell them to -- somebody.

So far, so good; but why would anybody want these things when the real value lies in the beneficial liability?

In the example above, the homeowner has available $50,000 worth of debt relief that somebody is going to have to eat. Wouldn't it be a better idea to package up a bunch of those?

You could probably get 80 cents on the dollar from people who could pay their debts. But you would rather not, and by removing the beneficial liability from the underlying conventional asset, you would restore the original loan to a nontoxic status. We call this plan the "Beneficial Liability Abatement Method," or BLAM.

Now I suppose there might be some fuddy-duddy CPA out there who doesn't understand our plan or thinks it won't work. That's OK. There are lots more who don't understand TARP. That isn't important. What is important is to get going.

All you have to do is get lenders to skim off their beneficial liabilities and BLAM them.

Then they can retain their underlying conventional assets without any writedown, as well as pick up a few bucks on the BLAM conversion.

Really, this is all so simple. If a bunch of golfers could figure it out over drinks and dinner and drinks, I can't see why those guys in Washington aren't all over it.

Fred Wolferman lives in Southern Pines. Contact him by e-mail at fwolferman@sbcglobal.net.