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Alternative to Bailout Pla, will you sent it to your Congressman?

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.

Public Comments

1. What about those of us that have a mortgage that is higher than 6% that have paid our mortgages and bills and are not in default? Why should someone get a better deal because they took out a loan they could not afford to begin with.? F@CK THAT!
2. I like it, but it will never pass. For one thing, it will be viewed as bailing out people who took mortgages they couldn't afford. How do we sort out who was truly victimized by bad subprime loans and who wasn't? I completely agree with you that the no golden parachute rule should apply to all existing CEOs of the failed institutions, but it will never, never pass Republican mustard. They have already stymied such language in the previous bill because they said it was unconstitutional. On the other side of the aisle, Dems will go balistic about eliminating the cap gains tax. Good plan, but it won't pass.
3. No one was victimized by bad sub prime loans. People always need someone to blame. Start with yourself. you should know what you can and cannot afford. I think this idea is a fine one. As for those whining about "my rate is high, why should someone else get a better deal" grow up. This isn't about you on an individual level, this is about what is best for America, not the individual person. If everyone would pay their bills on time, they wouldn't need sub-prime loans. The "people" wanted more equality, for the banks to be more fair. Personally, if the government continues to bail people out, then people will never learn to live within their means!