| | I can hardly believe it, but both Vitter and Landrieu opposed the recent bailout bill in the Senate. It's terrible that it still passed, but I'm truly glad that these two voted against the expansion of government interventionism. Besides that, the bill was LOADED with all kinds of pork (see below)
It was this kind of interventionism that led to the current mess. Example? Look up ACORN mortgage program, where the government helped people buy houses they couldn't afford. (Yes, owning a home is good thing, but giving somebody a mortgage they can't pay is not a good plan.)
I emailed and called both my senators, telling them to oppose this bill and I am thankful that they did.
PORK examples:
Sec. 502. Provisions related to film and television productions.
Sec. 503. Exemption from excise tax for certain wooden arrows designed for
use by children.
Sec. 504. Income averaging for amounts received in connection with the Exxon
Valdez litigation.
Sec. 505. Certain farming business machinery and equipment treated as 5-year
property.
Subtitle B—Paul Wellstone and Pete Domenici Mental Health Parity and
Addiction Equity Act of 2008
Sec. 602. Transfer to abandoned mine reclamation fund.
And about 400 pages of additional crap that had nothing to do with the current situation.
What would I support? Here's what I sent to my senators:
The Common Sense Fix
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 step 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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| | Posted 10/1/2008 10:24 PM - 37 Views - 0 eProps - 2 comments
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