Wednesday, October 1, 2008

I am afraid!

I think that we are in economic trouble as a nation. Our Senate is going to reconsider going $700 BILLON into Debt to try and Stabilize the market.
One of the principles I blogged on last was YOU CANNOT BORROW YOUR WAY OUT OF DEBT.
I think that if they pass this bill then the stock market will go up, and that temporarily that would be a good thing... but we will have to live with the consequences long term. The same way we as a family have to live with the consequences of the debt we get ourselves into. It really scares me.
I think we are really changing some of the fundamental principles of a fair competitive market. When do people get held accountable for the choices they make? When do businesses?

I know that innocent people are paying the price for others mistakes but I really worry that we are not using the right band aid for the wound.
Check out below if you are interested in the 3 ideas that made sense to Dave. I am glad he and others had time to look at this and come up with another solution. I wish they would at least consider this as a first step.

I don't pretend to understand this whole thing and from what I understand you need a law degree and an accounting degree to wade through this bill. I do believe there are other ways to handle the problem and I read through a plan that would cost us all a lot less money as taxpayers and let the market correct itself some.

Obama is supporting it. Bush is supporting it. McCain is probably supporting it. Everyone is freaking out and they think we can get out of this hole by digging!! It's disturbing.

I actually emailed my representative and the senators to pass on the plean that Dave Ramsey has been spreading the word about. I did it tonight which means they won't read it before they vote, but I felt like I had to do something to let them know that I didn't think the plan they are voting on is worth the risk to our economy.


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.

2 comments:

Trish said...

I passed along the same plan.
At least you can understand Dave's plan without a law and accounting degrees, huh?
It is a scary time and it'll be our great grandchildren who see the other side of it. yikes!

Heatherslife said...

I think that Dave has a great plan that could really make a difference and still force the people to be responsible for there actions and dig our selfs out of the mess rather than getting bailed out by our government. As far as the current proposal goes, I would MUCh rather see them pass this and put it in to effect then do nothing at all. We were all educated in school about the great depression and that is some thing that I pray my children and I will never have to live through. I think the current plan needs some seriouse revising even if they don't completelty rewrite it to Dave's suggestion:) But if it is either this or nothing...I vote Do it.

The big plunge...

Starting Weight 193.8
Week 1 194.2 - +.4
W- 2 190.2 - -4.0
W- 3 186.4 - -3.8
W- 4 186.2 - -0.2
W- 5 184.0 - -2.2
W- 6 184.5 - +0.5
W- 7 185.0 - -0.5
W- 8 183.2 - -1.8
W- 9 180.0 - -3.2
W- 10 183.2 - +3.2
W- 11 179.0 - -4.2
W- 12 177.1 - -1.9
W- 13 175.1 - -2.0
W- 14 171.6 - -3.5
W- 15 169.9 - -1.7
W- 16 168.4 - -1.5
W- 17 165.4 - -3.0
W- 18 161.9 - -3.5
W- 19 165.4 - +3.0
W- 20 163.0 - -2.4
W- 21 165.8 - +2.8
W- 22 162.0 - -3.8
W- 23 159.8 - +0.4
W- 24 158.0 - -2.7
W-k 25 156.4 - -1.6
W- 26 154.3 - -2.1
W- 27 153.9 - -0.4
W- 28 152.0 - -1.9
August 30, 2009
W- 29 149.9 - -2.1
W- 30 147.7 - -2.2
W- 31 147.1 - -0.6
W- 32 149.5 - +2.4
W- 33 151.3 - +1.8
W- 34 150.2 - -1.1
W- 35 150.8 - +0.6
W- 36 150.3 - -0.5
W- 37 149.1 - -1.2
W- 38 149.8 - +0.7
W- 39 150.1 +0.3
W- 40 156.3 +6.2
W- 41 153.3 -3.0
W- 42 152.6 -0.7
W- 43 152.6 -0.0
W- 44 150.7 -1.9
W- 45 152.4 +1.7
W- 46 153.0 +0.6
W- 47 152.3 +0.7
W- 48 150.1 -2.2

W- 49 147.5 -2.6
W- 50 146.3 -1.2
...
...
W- 53 151.0 +2.0
W- 54 149.3 -1.7
W- 55 144.9 -4.4
W- 56 144.1 -0.8
W- 57 140.0 lbs. Goal!!!!