RAHN: Lies or ignorance?

Time for an end to pork and confusion in the economic recovery bill. While Dave Ramsey is not an economist, his simple three-part, two-page proposal has merit: "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 sub-prime 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." via: http://www.daveramsey.com/common_sense_fix.txt

"A crucial problem of practical policy occurs when self-organizing economic systems are allowed to be influenced by political interventions... But policy measures can cause effects opposite to those intended if the complexity and nonlinearity of the economic growth is not considered." - Klaus Mainzer, Thinking in Complexity. Barney Frank, Chris Dodd and Charles Schumer were key individuals in political interventions through oversight and should be held accountable. President Bush should not have offered them the opportunity of economic control, oversight and taxes. (Perhaps he knew how they would handle it but they had the majority and it would have been to high a risk) It was a free market conflict of interest from the beginning. They came up with no changes, only additions to their power. If Nancy Pelosi hadn't stubbornly adhered to her eight year old, adolescent blame politics agenda, we would be well on our way to the transition to a regulated market economy and socialism. As it is, we are not passed it yet. Larrytex solution is private and free market. We need more ideas like that to take us away from the brink. We also need some complex control parameters with short foresight horizons, disaster recovery plans, business continuity plans and assurances that the recovery will not become another permanent bureaucratic agency. It's the 21st Century and like McCain said, we need change the way Washington does business and bring it up to the 21st Century.

Great report. And larrytex should provide his ideas to Congress.

The mystery is why is Bush treating the Democrats so tenderly. He sits by while Pelosi fills the halls of Congress with her hate filled speeches. He lets Schumer and Dodd and even Obama distort the facts and outright lie about what has happened. Lately it is President Clinton that has started contradicting the Democrat lies and obfuscations. He did it last week and again today: http://online.wsj.com/article/SB122282635048992995.html Once in a while I wish Bush would be as partisan as his predecessor was while he was in office. Bush obviously believes in country first and is willing to sit by and let the Democrats foam at the mouth while blathering outright lies all because he believes that a small price to pay to extract us from the hole the Democrats have put us in. I think Bush is just giving the Democrats a bigger shovel.