economic bail out

this is dave ramsey a financial guru giant! i trust nearly every financial word that comes from his mouth or finger tips. i highly recommend his book total money makeover he has an economic bail out plan of his own .... sounds the best to me so far! i really like it. now i can only pray that our government will come up with a solution remotely close to this because after all it makes sense.

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 threestep

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.