Dave Ramsey and his plan

[cashflow]

Okay, so someone forwarded me a link to this guys site and his ‘plan’.

What do you all think about this?

http://www.daveramsey.com/etc/fed_bailout/3_steps_to_change_the_nation%2527s_future_10928.htmlc?ictid=sptlt

Years of bad decisions and stupid mistakes have created an economic nightmare in this country, but $700 billion in new debt is not the answer. As a tax-paying American citizen, I will not support any congressperson who votes to implement such a policy. Instead, I submit the following three steps:

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. This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, to
stand up, speak out, and fix this mess.

[SD Realtor]

Ramsey has a syndicated show that you can catch on Sundays. He has made money by doing something pretty stupid which is to preach people should live within thier means…. His radio show basically consists of people calling in, and then telling him how they have paid down large sums of personal debt. The only thing of substance that he preaches is common sense which is nice to hear and it is nice to hear stories about people paying overcoming debt, working hard to pay it off, then moving on with life rather then simply walking away.

The many times I have listened to him, I have yet to hear him voice any partisan opinions but his southern upbringing would indicate he is of a conservative nature.

You may want to catch his show sometime just to put a voice with the idea he has posted which is not to bad by the way.

[SD Realtor]

Ramsey has a syndicated show that you can catch on Sundays. He has made money by doing something pretty stupid which is to preach people should live within thier means…. His radio show basically consists of people calling in, and then telling him how they have paid down large sums of personal debt. The only thing of substance that he preaches is common sense which is nice to hear and it is nice to hear stories about people paying overcoming debt, working hard to pay it off, then moving on with life rather then simply walking away.

The many times I have listened to him, I have yet to hear him voice any partisan opinions but his southern upbringing would indicate he is of a conservative nature.

You may want to catch his show sometime just to put a voice with the idea he has posted which is not to bad by the way.

[SD Realtor]

Ramsey has a syndicated show that you can catch on Sundays. He has made money by doing something pretty stupid which is to preach people should live within thier means…. His radio show basically consists of people calling in, and then telling him how they have paid down large sums of personal debt. The only thing of substance that he preaches is common sense which is nice to hear and it is nice to hear stories about people paying overcoming debt, working hard to pay it off, then moving on with life rather then simply walking away.

The many times I have listened to him, I have yet to hear him voice any partisan opinions but his southern upbringing would indicate he is of a conservative nature.

You may want to catch his show sometime just to put a voice with the idea he has posted which is not to bad by the way.

[SD Realtor]

Ramsey has a syndicated show that you can catch on Sundays. He has made money by doing something pretty stupid which is to preach people should live within thier means…. His radio show basically consists of people calling in, and then telling him how they have paid down large sums of personal debt. The only thing of substance that he preaches is common sense which is nice to hear and it is nice to hear stories about people paying overcoming debt, working hard to pay it off, then moving on with life rather then simply walking away.

The many times I have listened to him, I have yet to hear him voice any partisan opinions but his southern upbringing would indicate he is of a conservative nature.

You may want to catch his show sometime just to put a voice with the idea he has posted which is not to bad by the way.

[SD Realtor]

Ramsey has a syndicated show that you can catch on Sundays. He has made money by doing something pretty stupid which is to preach people should live within thier means…. His radio show basically consists of people calling in, and then telling him how they have paid down large sums of personal debt. The only thing of substance that he preaches is common sense which is nice to hear and it is nice to hear stories about people paying overcoming debt, working hard to pay it off, then moving on with life rather then simply walking away.

The many times I have listened to him, I have yet to hear him voice any partisan opinions but his southern upbringing would indicate he is of a conservative nature.

You may want to catch his show sometime just to put a voice with the idea he has posted which is not to bad by the way.

[TheBreeze]

Mr. Mortgage has a much better idea. Instead of doing a bunch of useless (and possibly disastrous) handwaving, all that’s needed is for pricing of mortgage securities to be done on a zip-code-by-zip-code basis. This would result in a real market for the mortgage securities instead of some propped-up monstrosity that will come cratering down sooner or later.

http://mrmortgage.ml-implode.com/2008/09/30/banks-bad-math-home-price-indexing-responsible/#comments

[TheBreeze]

Mr. Mortgage has a much better idea. Instead of doing a bunch of useless (and possibly disastrous) handwaving, all that’s needed is for pricing of mortgage securities to be done on a zip-code-by-zip-code basis. This would result in a real market for the mortgage securities instead of some propped-up monstrosity that will come cratering down sooner or later.

http://mrmortgage.ml-implode.com/2008/09/30/banks-bad-math-home-price-indexing-responsible/#comments

[TheBreeze]

Mr. Mortgage has a much better idea. Instead of doing a bunch of useless (and possibly disastrous) handwaving, all that’s needed is for pricing of mortgage securities to be done on a zip-code-by-zip-code basis. This would result in a real market for the mortgage securities instead of some propped-up monstrosity that will come cratering down sooner or later.

http://mrmortgage.ml-implode.com/2008/09/30/banks-bad-math-home-price-indexing-responsible/#comments

[TheBreeze]

Mr. Mortgage has a much better idea. Instead of doing a bunch of useless (and possibly disastrous) handwaving, all that’s needed is for pricing of mortgage securities to be done on a zip-code-by-zip-code basis. This would result in a real market for the mortgage securities instead of some propped-up monstrosity that will come cratering down sooner or later.

http://mrmortgage.ml-implode.com/2008/09/30/banks-bad-math-home-price-indexing-responsible/#comments

[TheBreeze]

Mr. Mortgage has a much better idea. Instead of doing a bunch of useless (and possibly disastrous) handwaving, all that’s needed is for pricing of mortgage securities to be done on a zip-code-by-zip-code basis. This would result in a real market for the mortgage securities instead of some propped-up monstrosity that will come cratering down sooner or later.

http://mrmortgage.ml-implode.com/2008/09/30/banks-bad-math-home-price-indexing-responsible/#comments

[EconProf]

When the government interferes with the sanctity of contracts, it scares future lenders and causes them to raise all interest rates, even to good borrowers. The responsible borrowers–those who have saved up before buying, will be penalized.
Cramdowns, bankruptcy judges forcing lower mortgage balances or interest rates, foreclosure holidays or delays, refusal by local authorities to enforce foreclosures–all these and other feel-good government actions are the mark of a banana republic that does not respect the rule of law.
For decades the US has had the world’s best and most efficient and respected mortgage market, attracting the world’s money. Now it is endangered by populist measures that will haunt us far into the future. Investors, foreign and domestic, will flee our shores, or stay and charge the appropriate risk premium.
Beware of the results when you move from the rule of law to the rule of men in this way.

[EconProf]

When the government interferes with the sanctity of contracts, it scares future lenders and causes them to raise all interest rates, even to good borrowers. The responsible borrowers–those who have saved up before buying, will be penalized.
Cramdowns, bankruptcy judges forcing lower mortgage balances or interest rates, foreclosure holidays or delays, refusal by local authorities to enforce foreclosures–all these and other feel-good government actions are the mark of a banana republic that does not respect the rule of law.
For decades the US has had the world’s best and most efficient and respected mortgage market, attracting the world’s money. Now it is endangered by populist measures that will haunt us far into the future. Investors, foreign and domestic, will flee our shores, or stay and charge the appropriate risk premium.
Beware of the results when you move from the rule of law to the rule of men in this way.

[EconProf]

When the government interferes with the sanctity of contracts, it scares future lenders and causes them to raise all interest rates, even to good borrowers. The responsible borrowers–those who have saved up before buying, will be penalized.
Cramdowns, bankruptcy judges forcing lower mortgage balances or interest rates, foreclosure holidays or delays, refusal by local authorities to enforce foreclosures–all these and other feel-good government actions are the mark of a banana republic that does not respect the rule of law.
For decades the US has had the world’s best and most efficient and respected mortgage market, attracting the world’s money. Now it is endangered by populist measures that will haunt us far into the future. Investors, foreign and domestic, will flee our shores, or stay and charge the appropriate risk premium.
Beware of the results when you move from the rule of law to the rule of men in this way.

[EconProf]

When the government interferes with the sanctity of contracts, it scares future lenders and causes them to raise all interest rates, even to good borrowers. The responsible borrowers–those who have saved up before buying, will be penalized.
Cramdowns, bankruptcy judges forcing lower mortgage balances or interest rates, foreclosure holidays or delays, refusal by local authorities to enforce foreclosures–all these and other feel-good government actions are the mark of a banana republic that does not respect the rule of law.
For decades the US has had the world’s best and most efficient and respected mortgage market, attracting the world’s money. Now it is endangered by populist measures that will haunt us far into the future. Investors, foreign and domestic, will flee our shores, or stay and charge the appropriate risk premium.
Beware of the results when you move from the rule of law to the rule of men in this way.

[Author]

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