The following is by Dave Ramsey:
Years of bad decisions and stupid mistakes have created an economic nightmare in this country, but $700 billion in new debt is not the answer. As a tax-paying American citizen, I will not support any congressperson who votes to implement such a policy. Instead, I submit the following three steps:
Common Sense Plan.
I. INSURANCE
A. Insure the subprime bonds/mortgages with an underlying FHA-type insurance. Government-insured and backed loans would have an instant market all over the world, creating immediate and needed liquidity.
B. In order for a company to accept the government-backed insurance, they must do two things:
1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes.
b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile while working with the borrower—again limiting foreclosures and ruined lives.
2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages. This keeps underperforming executives from being paid when they don’t do their jobs.
C. This backstop will cost less than $50 billion—a small fraction of the current proposal.
II. MARK TO MARKET
A. Remove mark to market accounting rules for two years on only subprime Tier III bonds/mortgages. This keeps companies from being forced to artificially mark down bonds/mortgages below the value of the underlying mortgages and real estate.
B. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks—and it costs the taxpayer nothing.
III. CAPITAL GAINS TAX
A. Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous—and immediate—liquidity in the markets. Again, this costs the taxpayer nothing.
B. This move will be seen as a lightning rod politically because many will say it is helping the rich. The truth is the rich will benefit, but it will be their money that stimulates the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down. This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, to stand up, speak out, and fix this mess.
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1 comment:
I like the economic plan. I'm afraid that we are outnumbered and failing at maintaining the principles of our free market. We have to learn to play their game, we still have a state and a Republican governor. We need to take the stimulus money but uphold our right to choose where it goes into the state. We can put the money back into Texas businesses that are maintaining success during this economic time in order to create new jobs and boost the strength of the middle class. We're going to pay for this whether we take the money or not, may as well take it and show the nation how Texans "git 'er dun". Publicize this move relentlessly, get it in the media. Whoever is leading the party really needs to learn to play dirty within the law. McCain gave them the presidency with McCain-Feingold and his "bi-partisanship". Are we fighting for conservative principles or inviting Lenin back from the dead?
Something else...PORK...while Democrats have the power and will pass anything, stack on the PORK, every last pork item we can think of to subsidizing the shoe shining business needs to be in the bill.
You fight fire with fire!
Americans need the wake up call, tell the nation you voted for every piece of pork in the bill and let us see if Obama can use the veto pad!!!!!
C.V. Wood - Elgin, Texas
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