A Letter to My Representative

My Representative voted NO on the first bailout bill, and the following is a letter that I emailed to say thanks for the vote, and to offer my suggestions for a common sense solution that I believe will do much to alleviate our current credit crisis without soaking the taxpayer for generations to come.

If you like this solution, please feel free to copy and paste this letter and email it to your representatives and senators.

Nikki

Congressman XXXX,

First, I want to thank you for your NO vote on the House's bailout bill. As I'm sure you know, the amount of money Treasury Secretary Paulson wanted, $700 Billion, would have placed an unbelievable burden on the already over-burdened American taxpayer, both now and for several generations yet to come. And the idea that Paulson wanted sole control over the dispersion of this money was a socialistic ploy that no American could allow to happen. Again, I appreciate your vote and I will remember it when it's time for me to cast mine.

Secondly, while realizing that Main Street will suffer from frozen credit markets and something must be done to remedy this, I would like to put forth the following simple, common sense suggestions, that if implemented, should quickly begin adding liquidity -- at far less expense to the American taxpayer than the unacceptably expensive and socialistic Paulson Plan.

1. Remove Mark To Market accounting rules on all subprime Tier III bonds and mortgages. This keeps companies from being forced to artificially mark down their inventory below the value of the underlying mortgages and real estate. This would have an immediate effect of stabilization on failing banks and it would add no cost to the taxpayer. Former Speaker Newt Gingrich estimates this step alone would solve approximately 70% of the liquidity problem.
   
2. Provide all subprime bonds and mortgages with an underlying FHA-type insurance. These government-insured loans would have an instant market all over the world, and thus, create immediate liquidity. Companies receiving this government-backed insurance must comply with all items through #6 below:
   
3. Rewrite any mortgage that is more than three months delinquent into a 6% fixed-rate mortgage.
   
4. Roll back all payments (with no late fees or legal costs) into the balance. This would bring homeowners current and give them a chance to keep their homes.
   
5. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the loan. In cases of imminent foreclosure or short sale, proceed as the FHA already does, and do not hold the borrower liable for any deficit balance so that the mortgage company will be motivated to work with the borrower while limiting foreclosures. Estimated cost: less than $50 million instead of $700 billion,
   
6. Cancel ALL golden parachutes for existing and future CEO's while their companies hold these government-insured bonds and mortgages.
   
7. And lastly, remove the capital gains tax in order to stimulate investors into the real estate and stock market in hopes of gaining tax-free profits. This step should create immediate liquidity. And again, it would add no cost to the taxpayers.
   
   

The wealthy will benefit, and they should because it will be their money that is stimulating the economy. I believe these steps will enable liquidity to flow into the credit markets while providing the American borrower adequate relief in order to survive this current crisis.

These ideas did not originate with me; rather, they are a collection of good ideas I gathered while listening to many others.

I trust you will give these suggestions your most serious consideration.

Sincerely,

Your Name
Your Address and Zip Code
Your Email Address