Sky2625
Wowza…never heard “spade” used that way before. I didn’t know I could conjure up racism just by bringing to mind something that is simply colored black (like an ace of spades). I’m not racist, I don’t think in those terms. I don’t see a cartoon chimp and think “haha black guy!” But if I didn’t understand the meaning of “call a spade a spade”, then that’s on me.
Somebody provide me with a non-offensive shorthand phrase I can use that will roughly equate to “let’s cut the BS and look at something squarely and honestly” because that’s what I mean when I say “CALL A SPADE A SPADE!” Ridiculous!
AUUUGH!
Now let’s put aside idiotic discussions of non-existent racism, and actually get to the point. Per JanS’s request, here’s my personal recovery plan with *details*:
Sky2625’s Economic Adjustment and Recovery Act:
Fix the Credit Crunch:
Plank 1: Change marked-to-market accounting rules to allow banks to re-value their subprime assets at 50% of their cash inflow, rather than current sale price (low), or previous purchase price (high). This will vastly increase value of assets on each banks’ books, and stop a large portion of the write-downs, stock losses, and profit loss.
Plank 2: Firms currently deemed too big to fail, should be nationalized. The functioning parts should be sold off to the highest private bidders. The failing parts should be allowed to fail. Assets must be liquidated, with the government receiving the revenue, and all assets returning to the private sector.
Plank 3: Kill the zombie banks, per Plank 2.
Address the Recession:
Plank 1: Repeal the Stimulus Bill
Plank 2: Pass a capital improvement/ infrastructure construction project stimulus only ($200 – $250 billion).
Plank 3: Pass a Temporary Recession Aid package that expands unemployment benefits, food stamps, and housing assistance. A 9-month term is placed on this package. ($150-$200 billion).
Plank 4: End capital gains taxes. In the near term, this would slightly beef up the rate of return on those falling 401ks and home values.
Plank 5: Keep money in Americans’ hands. Cut tax rates by 20% for every tax bracket, i.e. the top bracket would go from 35% to 28%. (20% of 35% is 7% – Yes, the poor won’t get as much of a cut, but they don’t pay hardly any money *in* anyway)
Plank 6: Put to bed fears of deflation in the near term, and inflation in the long term. Peg the American dollar against a basket of common commodities. This returns a sense of stability to the future, and allows investing and lending to start up again. You can always pull it off the backing again later.
Plank 7: Go forward with Obama’s Home Foreclosure plan, but pat one only (Fannie Mae/Freddie Mac re-financing plans). Create a foreclosure-limbo, where the government offers loan servicers a payment of 60% the value of the loan. The servicers can choose to foreclose, or they can take the money and walk. The government ends up holding more loans. Regrettable, but temporarily helpful.
Prevent another Mortgage Bubble:
Plank 1: Stricter regulation of credit and bond rating agencies. Prevent bond issuers from paying for better ratings of their bonds. Change the industry so that private consumers pay for the ratings at their own risk.
Plank 2: Regulate credit default swaps by requiring capital asset backing in some proportion to the amount of payout risk a firm might face.
Plank 3: Increased SEC regulation of regular banks acting as investment banks. If it quacks like a bank, it’s a bank, and it must be subjected to the 10:1 leverage ratio.
Plank 4: Cease expansion of Fannie Mae and Freddie Mac. Fully nationalize them. Prohibit any government entity from buying or lending anything but prime mortgages. Sell off their assets and close them down.
Plank 5: Limit the volume of FHA loans to 5% of the previous year’s total lending value (or stop altogether)
Plank 6: Require that loan originators hold, service, and bear the risk of 1 out of every ten loans of each type they originate.
Plank 7: Repeal the Community Reinvestment Act. Ban red-lining, but allow banks a freer hand in deciding who they will and will not lend to.
Plank 8: Long-term, base the mortgage finance industry on personal and business deposit-heavy private banks, not on leverage-heavy private and/or semi-public creditors.
Long-term Government Solvency:
Plank 1: Cut all government salaries across the board by 10%. Approximate savings = $35 billion.
Plank 2: Balance the budget. Put it to a vote by the people: either the Departments of Housing and Urban Development, Energy, Education, Health and Human Services, and Transportation are closed down immediately, and their funding is directed toward paying off the national debt, or taxes must increase by 15% uniformly to eliminate the deficit.
Plank 3: Reduce expenses on welfare and food stamps…pass these costs on to the states should they choose to continue these programs.
Plank 4: Alter Medicaid, Medicare, and Social Security so that benefits only go to those most in need, i.e. lower income brackets and/or the seriously ill.
Plank 5: Work towards a tax system with less loopholes and more enforcement, while simultaneously cutting tax rates to maintain near-revenue-neutrality.
Plank 6: Pioneer a feedback system that allows taxpayers to designate where some of their taxes go. Let departments within the government compete for this money…
There’s a start.
There might be some good ideas in there…maybe not. Anyone else have any ideas?