Open Question: What do you think of the Dave Ramsey "common sense fix" plan?

[Administrator]

http://www.daveramsey.com/media/pdf/...e_fix.pdfYears 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 supportany congressperson who votes to implement such a policy. Instead, I submit the following threestepCommon Sense Plan.I. INSURANCEa. Insure the subprime bonds/mortgages with an underlying FHA-type insurance.Government-insured and backed loans would have an instant market all over theworld, creating immediate and needed liquidity.b. In order for a company to accept the government-backed insurance, they must do twothings:1. Rewrite any mortgage that is more than three months delinquent to a6% fixed-rate mortgage.a. Roll all back payments with no late fees or legal costs into thebalance. This brings homeowners current and allows them achance to keep their homes.b. Cancel all prepayment penalties to encourage refinancing orthe sale of the property to pay off the bad loan. In the event offoreclosure or short sale, the borrower will not be held liablefor any deficit balance. FHA does this now, and thatencourages mortgage companies to go the extra mile whileworking with the borrower—again limiting foreclosures andruined lives.2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs andexecutive team members as long as the company holds thesegovernment-insured bonds/mortgages. This keeps underperformingexecutives 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 MARKETa. Remove mark to market accounting rules for two years on only subprime Tier IIIbonds/mortgages. This keeps companies from being forced to artificially mark downbonds/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 onfailing and ailing banks—and it costs the taxpayer nothing.III. CAPITAL GAINS TAXa. Remove the capital gains tax completely. Investors will flood the real estate and stockmarket in search of tax-free profits, creating tremendous—and immediate—liquidity inthe markets. Again, this costs the taxpayer nothing.b. This move will be seen as a lightning rod politically because many will say it is helpingthe rich. The truth is the rich will benefit, but it will be their money that stimulates theeconomy. This will enable all Americans to have more stable jobs and retirementinvestments 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, tostand up, speak out, and fix this mess.Im not asking this question for myself. I'm in no danger of foreclosure. I'm asking this question for in general purposes. I want people's opinion.

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