Posted by
MarkTheTruePatriotWest on Wednesday, October 01, 2008 11:48:51 AM
OK, I get it, you want a solution already. If I oppose the current bail-out bill, what would I do differently? Are you ready for a ride?
Let’s begin where we are: Main Street, USA. The bail-out bill, voted down by the House, was very shall we say, unfriendly to us. How can we make it Main Street friendly?
#1 What’s fair is fair! The bill MUST call for a FULL investigation of Wall Street and the Beltway. We MUST find out who did, or didn’t, act in the best interests of our nation and hold them accountable. Has anybody seen the tapes from the Freddie/Fannie hearings in 2004? It’s a real eye-opener!
#2 SAFE! The bill MUST extend FDIC protection of deposits to at least $250K. The folks have got to know their savings are OK!
#3 A little here, a little there! The bill MUST help people stay in their homes but NOT for free! Have them pay a rent or a lower principal/interest payment to keep the capital rolling.
#4 Do unto your neighbor… The bill MUST contain tax incentives for those individuals who seek to help others in this time of financial need! This could affect 401K, IRA withdrawals taken to help others with keeping a roof over their heads.
OK, now let’s shift our focus to Wall Street, USA. How can we help the economy without overburdening the taxpayers. I don’t know about you, but my budget cannot afford a tax increase. How can we make it Wall Street friendly without punished the average Joe?
#1 HOW much?! The bill MUST temporarily suspend the mark-to-market rules that have created as much as 70% of this crisis (that figure according to Chicago economists). This rule was a reaction rather than a proaction. It seems that our Congress has a reactive rather than a proactive tendency.
#2 Show me the money! The bill MUST reduce or rebate the capital gains tax for private investors who buy up the “troubled” securities and entities. Warren Buffett, one man, just poured $5 billion into Goldman Sachs…imagine what other private money can be brought in to fix this problem. Give them the incentive to bail each other out.
#3 Keep ‘em safe! The bill MUST create an insurance to cover the loss of these “troubled” assets that fail to be purchased by the private sector. Each entity will pay a premium that will provide coverage. This, used in combination with #2 should help shore up the “troubled” assets.
#4 Show me the numbers! The bill MUST establish government oversight for the program. This oversight would determine what securities and entities are “troubled” so that the tax issue I raised in #2 can be in place. This oversight would also monitor and regulate the bail-out transactions.
Has anyone noticed that the “media” now calls the bill a “rescue” bill instead of a “bail-out” bill? Don’t you wonder why? I do! Maybe it will turn the people’s “opinion” of the bill if they see it as a rescue rather than a bail-out. How stupid do they think we are?
That’s why I propose what I do. I believe it is the best fit to preserve capital, destroy debt, and enable liquidity. This proposal would rescue Wall Street AND preserve Main Street.
The bucket needs more water, but it needs the hole fixed as well! Main Street can’t be asked to sacrifice for Wall Street when we haven’t attempted to encourage Wall Street to sacrifice for itself.