Another proposal for a bailout?!

[shagdrum]

I figured I would post Dave Ramsy's proposal to fix this mess...

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.

 

[turborich]

Why help the home owners at all? They did this to themselves by taking insane loans they could never afford in the first place. They should not get any help at all! You make a foolish choice, you suffer the results of it.

 

[jhargarage]

shagdrum seems like common sence fix so the gov't will Not purpose it

Unless they can buy into the insurance aahaa

 

[Joeychgo]

Why help the home owners at all? They did this to themselves by taking insane loans they could never afford in the first place. They should not get any help at all! You make a foolish choice, you suffer the results of it.

In a strict sense, yes. But, they had some help. They had mortgage people telling them it was ok, that the could afford it. Were they dumb, yes. But there is alot out there to protect dumb people. As the regulations were eased over the years, many of those protections vanished. As a result, used car salesmen traded in their cars for mortgage lending.

We need to get the housing and credit markets going again. There isnt much money out there to loan out.

This this doesnt trickle down? McDonalds just told their franchisees yesterday that they cant get financing through Bank of America right now, so all the coffee bars that franchisees were suppose to install are now on hold. There were suppose to be 14,000 McDonalds coffee bars built this fall @ $100k each. Thats $1.4 billion that would have been spent this fall on contractors, electricians, equipment, etc. That is jobs, good paying ones, that wont be there. Not to mention the local jobs and local tax dollars generated by the coffee bars.

So this is a crisis that will filter down and touch every one of us to some point. We need to resolve this. Im not advocating the bailout plan as it stands now, but something has to be done.

 

[fossten]

This is capitalism, people. There is risk inherent in capitalism. If you remove the risk, you encourage more speculation and wild deals.

 

[jhargarage]

do the decision makers try some of these things because succeed or fail they will not be affected?