Bailout Alternative

    I usually don't stray from topics involving guns, but if things on this whole bailout mess continue as they've been going, I'm afraid guns will be involved sooner or later.

    Everyone is upset about the Bailout plan, but I've heard few alternatives suggested – the most common being send everyone to jail and let Wall Street melt down and the one where the government should give us all a million dollars so our dollar would really be worthless…  

    Here is an alternative I got from my old friend Dave Ramsey (www.DaveRamsey.com) that actually makes sense and doesn't cost 700 Billion dollars.  I don't know if this is Dave's idea or one he picked up from someone else, but it's a good plan and needs to be read by every elected representative in the country.  Remember that little politicians and party activists often have unlisted numbers for the big politicians so don't be shy about spreading this around.

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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 three-step, 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.