ABOLISH CAPITAL GAINS TAXES

This could be our Golden Parachute.

Okay I didn’t go to Harvard business school but I do think there is a simple solution to the problem of what to do with all of these delinquent mortgages that doesn’t have to cost the taxpayers 700 billion dollars. I wish that I could say I thought it up my self but I didn’t. But at least I am smart enough to recognize a great idea when I hear one. I first got wind of this idea when a colleague sent me a link to a Dave Ramsey article and then I had to turn around and shout it from the rooftops.

One of the most interesting things about this plan you abolish capital gains taxes completely. This lets investors buy these homes facing foreclosure and turn them around. If they don’t pay capital gains on their profits suddenly it becomes worthwhile to do it. Both the stock market and the real estate market would benefit from this.

Then you stiffen the rules for lenders requiring them to rewrite all of the loans that amount to nothing more than predatory lending to begin with. In other words if you were unethical enough to write a loan for someone who actually could not afford the payment when the loan adjusts, then instead of going to jail for loan fraud, Mr Predatory Lender, you can rewrite the loan to a 6% fixed interest rate the borrower may actually be able to pay.

There is a lot more to his plan that makes sense. Follow the link and read the article. Truthfully I haven’t ever listened to his radio show or read any of his books. I don’t really even know who he is

I would add something to Mr Ramsey’s plan. A simple thing that you could do is to make all these new loans rewritten at 6% fixed fully assumable by anyone who actually qualifies for the loan under normal underwriting guidelines. So if the struggling homeowner is facing a health care crisis, or used to work for WaMu, they might be actually able to sell their home to someone.

The biggest problem I have with the bailout and the subsequent nightmare is that it’s all too quick, with no time for other ideas to come to the surface. We are being told that there are dire consequences if we don’t bail out these banks this week. But we are being told this by the same liars that told us that there were weapons of mass destruction in Iraq! So are we going to let ourselves get scared into the second worst decision of the 21 century?