Wednesday, October 01, 2008

Politics as usual

Regardless of your party affiliation or political views the current mess on Wall Street needs to be fixed by a Common Sense approach & not the emergency $700 billion dollar band-aid that you & I will have to pay for from our hard earned dollars.

I found this plan & I personally like it, I have sent it on to my elected representatives and to the two gentleman running for President. If you read this and feel the same please contact your Congressmen & Women immediately!

The following is my preface to the plan:

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 or re-elect any congressperson who votes to implement such a policy. I am also sending this information to my 300 close friends & suggesting they also support this plan. I submit for your review the following three steps:

Common Sense Plan.


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.


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.


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.

I have added the links to the Senate & Representatives to make it even easier for you.
Be persistent as some of the links are slow due to people trying to contact these folks.


The man who thought up this plan is a financial counselor, Dave Ramsey
We are starting his 13 week Financial Peace Course tonight! I will keep you updated on our progress in class and how it is working.

Blessings 2 U Friends!

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