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Conservative GOPers Release Alternative Plan on Financial Crisis
The Republican Study Committee (RSC), a faction of small-government House conservatives led by Rep. Jeb Hensarling of Texas, has released an alternative plan for dealing with the Wall Street crisis, in opposition to the $700 billion bailout being proposed by the Treasury Department.
The stripped-down plan advocates a two-year suspension of the capital gains tax and calls for pull privatization of Fannie Mae and Freddie Mac, which were taken over by the federal government earlier this month.
The RSC's opposition to the bailout -- coupled with concern among progressive Democrats that the measure doesn't do enough to help homeowners -- could complicate efforts by House leaders to quickly pass legislation.
According to The Hill, the RSC argues that the bailout plan "fundamentally alters the nation's free-market system in that it broadly socializes firms' money-losing mortgage assets and places the U.S. on a slippery slope whereby profits will also be nationalized."
Josh
Zachary
So...
This is what's supposed to happen when those in charge destroys a democracy.
You should have thought about this BEFORE you decided the commoners were just here to be used....
September 23, 2008 4:31 PM | Reply | Permalink
Do these fools live on another planet? The problem with Wall St. is that the capital gains is too high? Ever notice conservatives have an obsession with the capital gains tax, and after they use abortion and guns to get elected, this is what they actually give their attention?
And for crying out loud, privatization of Fannie and Freddie was part of the problem. Turn them into just government agencies.
And tax capital gains like any other income. In fact, let's make that a condition of passing the bailout.
September 23, 2008 5:19 PM | Reply | Permalink
It wasn't privatization that got Fannie and Freddie in trouble. It was Congress passing regulations that forced banks to lend money to people who were not going to pay it back in the name of "affordable housing."
Without the government's pressure and support no sane free market businessman would have made these bad deals because he would have known that he would be on the hook if the money was not paid back.
However, knowing that the bad paper could be packaged up and sold to Freddie or Fannie let them all off the hook.
Anything the government touches gets screwed. I challenge anyone to name one program that the government runs, controls or influences that is a success. We have thrown trillions of dollars at poverty in America, and what has been accomplished? Nothing but a larger national debt.
It is time for every American to work and pay his or her own way instead of standing in line at the Big Government soup line.
Someone has to buy the soup . . .
September 26, 2008 8:55 AM | Reply | Permalink
The only surprise here is that it took them so long to get here. This just shows you how much off their game the GOP actual is.
September 23, 2008 5:36 PM | Reply | Permalink
Notice that they don't fundamentally object to socializing losses, they're only worried about it because it could lead to "nationalizing profits."
(Heck, it could lead to dancing!)
September 23, 2008 5:40 PM | Reply | Permalink
How does it help to put a moratorium on the capital gains tax when the problem is primarily with securities that banks would have to sell at a loss?
September 23, 2008 6:14 PM | Reply | Permalink
And while We the People are at it we should nationalize the Oil Industry . . . And demand that any company doing business with any governmental agency in the good ol' US of A be headquartered on the soil of one of the 50 states.
September 23, 2008 6:17 PM | Reply | Permalink
Oh that would be great. When is the last time you were in the department of motor vehicles? And you think these people will do a better job with our energy resourses?
I shudder to think of that possibility.
September 26, 2008 9:02 AM | Reply | Permalink
While we're at it, perhaps we could socialize -- oh, I don't know -- Haliburton and KBR. Or at least fire them and return their functions to the military.
September 23, 2008 6:21 PM | Reply | Permalink
The Dems should put tripling capital gains on the table.
September 23, 2008 9:37 PM | Reply | Permalink
They never miss an opportunity to call for an end to the cap gains tax. While they're at it, why don't they try to zero out the estate tax, and drill for oil in the Rose Garden? I hear those things would cure all kinds of financial ills.
September 23, 2008 11:25 PM | Reply | Permalink
Boy, talk about being stuck between a rock and hard place. On one hand, I say let Wall Street crash and burn. The federal government does not have a single dime to spend right now, much less a trillion dollars. If this money is authorized, you can basically kiss goodbye everything Obama planned to do in his first term. Plus, the Chinese will completely own us after this. OTOH, many average Americans (including me) have some amount of money invested in Wall Street. If they crash and burn, there goes the rest of middle America's nest egg (adding insult to injury after losing the equity in their homes over the past two years).
There is only one fair way to implement this bailout that will not destroy our country. Add the provisions Barney Frank has proposed (among which I believe is a 10% tax surcharge on those earning over $500,000 per year until the debt is paid—and this on top of rescinding the Bush tax cuts, IMO.) Sadly, I can almost guarantee that the Dems will cave and accept a watered down bill that dumps the burden on generations to come. In such a case, there will be no "change" in this country regardless of who gets elected. Now, if global warming would just speed up, I could consider moving to Canada (a bit nippy there for my tastes, right now.) ;-)
September 24, 2008 5:38 AM | Reply | Permalink
Why does the Republican Study Committee hate America?
September 24, 2008 2:45 PM | Reply | Permalink
Wow, this plan is a good idea...on opposite day. All three of these provisions will make things worse.
Repealing capital gains would make things worse by giving the government less revenue to stimulate the economy.
Privatizing Fannie and Freddie would make things worse by making the market lose confidence in _all_ mortgage-backed assets, not just subprime ones.
Suspending mark-to-market is the worst idea of the three. The investment community believes that financial institutions have a lot of toxic paper on their books. Making it easier for institutions to hide the toxicity of their paper won't make investors change that belief--it'll just make them lose even more confidence in the solvency of the financial system, and thereby less likely to invest or lend. Suspending mark-to-market could create a multi-decade economic slump like Japan has seen.
September 24, 2008 3:24 PM | Reply | Permalink
If Freddie and Fannie were run by private businesses without big government assurances backing them, they would have to rely on sound lending principles instead.
What a novel idea . . .
September 26, 2008 10:10 AM | Reply | Permalink
It's sad to read so many posts in favor of the government taking control of this and that, nationalizing oil, etc. Since when did we become a nation of babies, increasingly relying on the federal govt to take care of us from cradle to grave? It is not the govt's responsibility to stimulate the economy -- whenever it tries to, problems like this occur down the road. Govt needs to do only one simple thing to help the economy: get out of the way. If a company is going to die, let it! The free market will auto-correct every such situation, if allowed to operate without interventionist regulation.
Unfortunately, hordes of you "Mommy-govt" types keep asking for more state control of your lives, savings and spending choices, until we're all brought down to the same, cruel level of poverty and suffering like every other socialist regime the world has ever had to endure. All in the name of equality of outcome. What we need is more equality of opportunity taught in the schools, so future generations of citizens will be brought up with the principles of self-reliance and personal responsibility.
Someone will now call me a heartless facist, and ask about those who cannot help themselves. Historically, the percentage of any given population who cannot work due to disease or disability is less than 5%, more recently less than even 2% or 3% (which is figured into the traditional 5% to 6% unemployment rate, meaning part of that measurement is also made up of honest people being temporarily laid off, and another part being pro-communist hippies who choose not to work and want the rest of us to support them so they can go fish and write poetry with Marx). Some small amount of tax can be easily maintained to support that marginal group of people who *cannot* help themselves. Any moral, civilized society bears such a responsibility.
No corporate welfare, scale back the citizen welfare, and get the govt out of OUR free market. Capitalism = real justice.
Oh, and VOTE QUIMBY! ;)
September 26, 2008 5:20 AM | Reply | Permalink
I know everyone hates to see the rich get tax breaks as well as corporations, it does seem like a bite doesn't it. Fortunately for us the rich pay about 97% of the taxes in this country and the corporations actually hire you and others to work for them and pay your salary. Corporate profits equal expansion which equals new jobs. One this I will say is that corporate board of directors need to cut out the gold parachute theory. The parachute eliminates any need to succeed. Letting the government step in and give away our money to people who didn't run their businesses well is the really crime. We are giving money to theives who already robbed us blind. The government is what caused this problem, I am not sure they are the ones to solve it.
September 26, 2008 5:38 PM | Reply | Permalink