RSSThe Main Street Rescue Plan
The Main Street Rescue Plan
Congress will be voting on a revised Wall Street Bailout Plan as early as October 1, 2008. If you believe that Congress should be focusing on Main Street first, then please click here to send an email to your elected officials telling them you don’t want the government spending billions of dollars on bad loans.
Thanks to all who sent email to their elected officials. As you know, the bailout bill passed although it did contain some of the provisions in the Main Street Rescue Plan. We will be expanding our campaign to educate our elected officials on the consquences of run away debt and our unfunded social obligations in the near future.
Phase One - Immediate Action by U.S. Congress
1. Securities and Exchange Commission
Mandate that the SEC:
- Suspend its “mark-to-market” accounting regulations that are causing the write-down of bank assets to fire-sale prices, and thereby contracting the supply of available investment capital.
- Tightly restrict short sales of financial stocks.
2. Federal Deposit Insurance Corporation
Mandate that the FDIC:
- Declare a national emergency during which time the FDIC will back depositors and general creditors of banks that fail and resolve those collapses in a way that does not cost depositors, such as selling deposits and loans of the failed institution to another institution.
- Reconstitute the FDIC’s “net worth certificate” (NWC) program that Congress created in the 1980s for the savings and loan crisis of that era. The NWC required no federal subsidy or cash outlay. Under the NWC, the FDIC bought subordinated debentures in the bank and issued FDIC notes to the bank, with the interest being the exact same on both instruments. Under this program, the FDIC assesses the financial condition of banks and shores up weak ones that can survive if given time to resolve their problems and merges/liquidates those too weak for the NWC program. Under the NWC program, the FDIC will provide strict supervision of participating banks, including the employment of key personnel and their compensation, until the crisis has passed. Again, no federal subsidies or outlays are required.
- Declare a 120-day moratorium on payment of dividends by banks. Executives of banks that need capital often worry that failing to pay dividends is a sign of financial instability. A temporary ban across-the-board will end fears and give FDIC time to strengthen banks’ capital base.
- Expand FDIC insurance coverage to other financial institutions, including hedge funds, placed under federal regulation.
3. Stabilize Owner-Occupied Homes
- Declare a 120-day moratorium on mortgage foreclosures. This will (a) keep families in their homes while components of the broader plan are put in place and the real economy is revived; (b) better ensure that the property does not fall into disrepair; and (c) reduce the decline in housing values created by unoccupied, foreclosed homes.
- Devise a post-moratorium program to do work out plans for owner-occupied homes, including federal cash subsidies for owners that can pay for their homes if given time to financially survive this crisis.
- Amend federal law so that federal bankruptcy judges are able to modify the terms of mortgages of homeowners in bankruptcy and thus give them more time to work through their financial problems and keep their homes.
4. Share Rescue Profits with U.S. Taxpayers
- Whenever the government makes a loan or an equity investment in a distressed financial institution, such as the AIG deal, the public gets a share of any future recovery profits.
- Create a true “Social Security Lockbox” for the warrants and equity the federal government acquires as part of this financial rescue. The goal is not long-term federal ownership, but to assist these organizations in returning to a sound operation and then make a prudent sale of the public equity.
- Restrict the investment of those funds to AAA-rated state and local infrastructure bonds, which provide safe, long-term investments that will stimulate the real economy, create new jobs, and fiscally strengthen the Social Security System.
5. Oversight
- Create an independent agency/board to oversee and manage the non-FDIC/SEC portions of the Rescue Plan and report to Congress on a regular basis. The Board would consist of:
- Secretary of Treasury (Chair).
- Chairman of the Federal Reserve Board,
- Chairman of the FDIC,
- Chairman of the SEC,
- Comptroller General of the United States,
- One appointee by each of the Majority and Minority Leaders of the House of Representatives and the U.S. Senate.
- Create a new Joint Committee of Congress to oversee the plan and provide recommendations to Congress. The new Joint Committee would consist of representatives from all standing committees with partial jurisdiction for resolving this financial crisis. The goal is to involve all relevant committees in this rescue plan.
6. Create an Emergency Financial Crimes Office in the Department of Justice
- The mission of this unit is to investigate any criminal acts that led to this crisis, hold the guilty accountable, and disgorge assets from individuals and institutions found guilty.
- The head of the Office will be an experienced, non-political career prosecutor appointed by the President and confirmed by the U.S. Senate.
- The Congress will provide sufficient funds to staff the Office with qualified attorneys and the necessary support staff of accountants and investigators.
Phase Two - Action by Congress Post-Election
7. Reinstitute a modernized Glass-Steagall Act, which covers and regulates all financial institutions including hedge funds
- The goal is to restore prudence and accountability to the U.S. financial system through appropriate regulation.
- Oversight of the financial rescue.
67 Responses to “The Main Street Rescue Plan”
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November 7th, 2008 at 10:34 am
Mr. Perot,
I really wish it was President Perot.
It was an honor to vote for you both times that you ran for President, and to get 125 signatures in a petition that you organized to stop NAFTA. I remember when you said at that time that the real heroes of America are the hard working men and women and the military who protect this wonderful, most peaceful and generous land of ours. Not the sports figures and celebrities.
Given the current crisis in economy and housing that we are facing right now, this is what I wrote to my senators and representative.
“I just found out that Indy Mac Bank Federal has extended a 3% fixed rate for those that are supposedly having a hard time paying their overextended home loans for the next five years. I also own a home, but I’m paying about 6%. I have paid on time and have not borrowed money on my home like others have. This has depressed me so much and has made me feel like a complete fool knowing that my 800 credit score means absolutely nothing. I also found out that others who borrowed hundreds of thousands of dollars on their homes, went on European vacations, bought BMW’s and Mercedes, did huge remodeling projects and even saved the extra money in the bank are now saying that they are having a hard time paying their loans. So they get to reduce their loans to 90% of the present value which is in some cases about 50% of the original loan. And here I am, making timely payments with high property taxes by scraping and saving by not going on any vacations at all, not eating out at all, driving the cheapest economy car I could find, and doing any remodeling that I need all by myself so that I will not default and keep my high credit score. Boy do I feel like a fool! Is this how the responsible and hard workers get rewarded? I feel like just walking away from my loan myself. I would have never thought it would come down to this when an irresponsible person missing their payments gets a huge reduction in their loan and interest rate while a responsible person suffers for the rest of their life. Please treat us fairly. At the very least, I believe strongly that a much lower interest rate like the 3% Indy Mac Federal gives should be extended to responsible homeowners as well. This will accomplish many objectives at the same time. It would encourage for all to stay in their homes which would nearly halt foreclosure rate increase. It would create the ultimate stimulous package to especially the responsible citizens who would in turn help the economy by spending and keeping current on all their bills at the same time. And it would also create interest again in home ownership which would finally turn the values of homes in the positive direction. Please help in doing what’s right for all the people. Thank you.”
October 30th, 2008 at 4:11 pm
Mr. Perot
How I wish that you would have run for President this time. I voted for you when you ran before. There are so many boneheaded Americans who want the government taking care of them. Obama is encouraging this parasitic lifestyle, but it is only going to make it rough on the ones in the country who want to work.
It’s a sickening situation.
You would have been better for our country because you are successful on the business end.
This has been a very depressing election.
Thanks for all you have done and I love your website.
October 29th, 2008 at 10:48 pm
I own my own real estate company and I have specialized in foreclosures since I started. Banks brought this on theirselves, let me explain. IN 2003, when the market was hot…Banks would take 100-500 down on a foreclosure as earnest money. If a buyer was buying the home through FHA lending and the home had no heat or ac or any other problem you could structure the offer so the Banks paid for repairs to the home to make it FHA lendable. Now in 2008, they want 500-2000 dollars down earnest money and for buyers to escrow their own money for repairs needed.A month ago, Countrywide started insisting that anyone wanting to but their homes had to be pre-screened through them in order to accept an offer on their home. Say you are a buyer with a low credit score and you already have a wonderful lender, you don’t want your credit pulled again just to buy a home. These reasons are why there are alot of foreclosures on the market. If the banks want to dump them so bad why are they just reducing the prices of the homes. Why, I will tell you. The government will let them write off the bad debt or they will buy the debt themselves with this bailout money. Banks are looking to taxpayers to pay them out of this mess they created. We should mandate that all foreclosures be FHA acceptable and occupant ready and banks should shoulder this responsiblity. The value is added to the home, it is then lendable, and it will sell incredibly faster. In this economy first time homebuyers don’t have 7000 dollars to ante up on a 50 thousand dollar home and that is what banks are wanting. Are they stupid — YES!!!!!And they just added that buyers now have to pay interest on the offers they make if the banks don’t close when they said they would. that’s right 10 days after the date set for closing …. the buyer has to pay seller if banks don’t preform. RIDICULOUS that should be paid by mortgagors. If they can’t do what they said they would why should a buyer have to pay???? So this is why people are scared to write offers and buy. Also a week ago clients of a friend of mine made offer after bank said they were qualified. They spent 5 thousand dollars to add heat and a few more items to make a house FHA ready so they could get the loan…. Guess what the bank says oh no you can’t get loan now. So they lost 5 thousand dollars on house they can’t get their money back from bank who owns the house and they can’t buy it. And you think this encourages people to go rush out and buy houses. NO!!!!!
October 29th, 2008 at 7:44 pm
Mr. Perot
I would like to say thank you for all that you have done for us over the years. I was only a teenager when you were running for president, my mother and father both voted for you and I would have to if I could. Thank you for spending alot of your personal money in your attempt to fix the debt of the nation and break the stranglehold of the two major parties. I now know about how the Two parties took the debate control from the league of women voters and gave it to an entity headed by the former leaders of the two major parties. It seem tyrannical to me and is clearly designed to stiffle out competition. What you did was very heroic and I just wanted you to know that it was appreciated.
Thanks
Steve from minnesota
October 24th, 2008 at 12:12 am
We must encorage production, savings, and intelligent capital allocation. End the banking cartel’s issuance of money by removing legal tender laws and allowing free market currencies to compete with the federal reserve note. Alter tax legislation to allow people to pay their taxes in currencies other than the federal reserve note. This will result in an end to the FED and will restore to the free market the power to intelligently set interest rates. Central planning and government enforced cartels are morally bankrupt, tyrannical, and doomed to failure. You can’t get something for nothing.
October 21st, 2008 at 8:12 am
“Whoever controls the volume of money in any country is absolute master of all industry and commerce . . . When you realize that the entire system is easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.” President James A. Garfield
Congressman Wright Patman declared, “The dollar represents a dollar debt to the Federal Reserve System. The Federal Reserve Board creates money out of thin air to buy government bonds from the United States Treasury, lending money into circulation at interest, by bookkeeping entries of checkbook credit to the United States Treasury . . . Which the American people are obligated to pay with interest.” (House Banking Currency Committee, 1964)
For some quick answers to frequetly asked questions about the bank9ng system and the Ferderal Reserve System, see “MONEY FACTS 169 Questions and Answers on Money - A Supplement to A Primer on Money”, prepared by the Subcommittee on Domestic Finance, House of Representatives, 88th Congress, 2d Session:
http://www.dewoody.net/money/
It is a real eye opener!
October 20th, 2008 at 1:14 pm
Mr. Perot:
You’re brilliant sir, and if this country ever needed anybody with your strength, insight and foresightedness it’s now. I remember watching the debates and in spite of being an early teenager, even I knew that your enormous grasp on common sense was an integral part of a complex answer to an unprecedented myriad of problems.
It’s beyond shameful that the American people didn’t like to be told that if they want their country to prosper they’d have to get sweaty and get some dirt under their fingernails. In my opinion we didn’t deserve you as our leader. Unfortunately we’re now learning the difficult lessons you tried so hard to teach us and steer us away from.
God bless you Ross, we love you.