Alternate House bailout plan from a few Democrats
Posted by Mike Sylvester - 9/30/08 @ 8:57 pm - Filed Under 2008 National Elections, National Politics
A few House Democrats have unveiled an alternative plan to the “socialist” 700 billion dollar bailout. This plan is not perfect; however, it is much better then the plan the Bush Administration and the Democratic and Republican leaders of Congress came up with. Far better.
1. For financial institutions require the Securities and Exchange Commission (SEC) to require an economic value standard to measure the capital of financial institutions rather then using mark-to-market accounting rules. I feel the wording on this would have to be tightened up; however, it would work.
2. Require the Securities and Exchange Commission to restricting naked short sells permanently. I think I am in favor of this; however, I would have to research it further.
3. Require the Securities and Exchange Commission to restore the up-tick rule permanently. I think I am in favor of this; however, I would have to research it further.
4. This bill will require FDIC to implement a net worth certificate program. The FDIC would determine banks with short-term capital needs and the ability to financially recover in the foreseeable future. For those entities that qualify, the FDIC should purchase net worth certificates in these institutions. In exchange, these institutions issue promissory notes to repay the FDIC, counting the amount “borrowed” as capital on their balance sheets. This exchange provides short term capital, with not cash outlay. Interest rates on the certificates and the FDIC notes should be identical so no subsidy is necessary.
Participating banks must be subject to strict oversight by the FDIC including oversight of top executive compensation and if necessary the removal of poor management. Financial records and business plans should be subject to scrutiny while participating in the program.
This provision is not something I would normally favor; however, it is far better then purchasing 700 billion dollars of risky assets that no one wants. I think this is an interesting idea and I think it could work.
5. Increase the FDIC limit from $100,000 to $250,000. I am in favor of this as long as the fees are increased to keep the fund solvent.
This solution comes from a few House Democrats. It is not the plan I would choose; however, it is “head and shoulders” better then the “socialist” 700 billion dollar bailout bill that the Bush Administration along with the Democratic and Republican leadership came up with.
I hope the conservative House Republicans come up with a plan soon as well.
The Democrats who came up with this plan should be congratulated because they came up with something far better then the bill that was voted on yesterday in The House.
I still cannot believe the “rush to judgment” that the Bush Administration along with Democratic and Republican leaders in Congress insisted on. It is just mind boggling.
Mike Sylvester
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7 Responses to “Alternate House bailout plan from a few Democrats”
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I have spent more time deciding on a car purchase than Congress has taken to figure out this mess.
This recent plan makes way more sense, which automatically will put it behind the eight-ball.
Jim Cramer on CNBC has been calling for No. 3 and No. 5 since last Friday.
I agree this whole thing was rushed. I don’t trust the Bush administration to solve the problem. We need a real debate involving a variety of options and if that takes a couple of weeks then so be it…
I think we should look at how Iceland dealt with a similar situation…the government guaranteed all deposits, bonds and assets held by banks for 5 years. So nobody could loss money if a bank failed, including bank customers and bond holders of the banks.
This did two things, it stop people from taking money out of the banks and it allowed banks to raise funds by issuing bonds.
Let see the market has not crashed but now is being reported that it has faith in congress to do the right thing…. Dahhhhhhhhh…..
Mike, this is lightyears better then what they turned down…. I wonder what the Senate is going to debate and pass on Wed???? I heard it has some tax plan attached to it but no clue what that means. Keep in mind the tax part came from a reporter who had talked to someone reportly in the know….
However, if I was voting, I could vote for this but be scared to hell this is not enough and this is not the end to the nightmare.
I was reading a UK paper today and the writer believes a bunch of the American money will be used offshore. That may be why the CAO reported the financial needs, as they looked at, here in the states was only a fraction of the 700….
Go figure.
J.Q.:
Because you appear to have a sense of humor and common sense too, let me propose a solution. I don’t have any idea if it even could work but you take a shot at it.
Take 500 billion bucks, devide it by the number of U.S. Citizens over 21 years of age. Devide the answer into the 500 billion. Then:
give each person stated above that amount in cash (yes, it’s socialistic). Then take 35% of the amount you just got and pay your taxes. Uncle Sam gets 35% back right away.
While there would be a percentage of people that would squander this money, it would still get back into the economy. Those of us that did not squander this “rebate” could pay off our homes, credit cards, car loans, etc. That helps solve the current loan default rate, opens up more spending, creates jobs, sells cars, TVs, homes, and so on.
Just for grins…. someone do the math. My calculator won’t go out more than 9 spaces. Go ahed, “Make my day”!
Here you go John……..
So here is what 500 billion bucks will buy you…..
Every man, women, and child in Allen County would become a millionaire…. Each would get 1.43 million dollars before taxes.
We could build over 900 hospitals that copy what is being constructed by Parkview off Dupont Road.
The new car manufactures could give away all the cars they produced in 2007 for the next 48 years
Allen County employers pay about 10 billion in wages per year. For the next 30 years they could mail free checks to these employees and give them an annual pay increase of 3.5%
Now we are talking REAL MONEY!!!!