Tuesday, March 24, 2009

Solutions to credit crises were outlined six months ago!

What is taking so long? Chalk one up for the inefficiency of government.

Here is part of a piece I wrote on October 1st, 2008, 6 months ago! The government is just beginning to, possibly, follow some of these ideas.

A free market economic plan to deal with the credit crisis

  • Securities and Exchange Commission (SEC) opens a free and open trading market in mortgage backed securities (MBS) in one of the major exchanges.

  • SEC suspends mark to market accounting practices on MBS

  • No capital gains tax levied on profits from trading MBS

  • The Treasury Department will be allowed to purchase and sell MBS on the open market with the intent of securing appreciating assets for the treasury; and will be authorized for a maximum pre-determined dollar amount deemed appropriate by congress with oversight protections and General Accounting Office (GAO) review powers

  • $5000 Tax deduction for all homeowners who have not defaulted on either their primary and/or secondary mortgages currently held for at least 5 years

  • Increase in FDIC insurance limits to $250,000 per account

  • Repeal the Community Reinvestment Act and offer legal protections for banks that adhere to clearly defined credit and lending parameters, including those that lead to “redlining.”

  • Form a Commission to lay the groundwork, including timetable, for the privatization of Fannie Mae and Freddie Mac

  • Full disclosure to shareholders of all contracts and “buy out/golden parachute” clauses of top executives in financial institutions prior to approval by the board of directors of any financial company.

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