Newt and Dave Have a Plan

by Ryan on September 30, 2008

in Economy,Election 2008,Politics

Former House Speaker Newt Gingrich has articulated a very simple immediate solution to the Wall Street crisis: end “mark-to-market” (or fair value) accounting practices which undervalues assets and solve 70% of the crisis today.  That’s why Paulson thinks he can use the $700 billion to buy these assets at 10 cents on the dollar and sell them for much more, making money for the government in the long-run.  Why?  Because they are undervalued to begin with.  Change the formula to a rolling average and immediately these broken assets become much more valuable.  Plus, this could end the paralysis on Wall Street:  why would Wall Street do anything while Congress debates; why not wait until they figure it out first, market be damned?

Some of Newt’s other ideas for the long-run are:

  • Create a “work-out” rather than a “bailout” plan where the government sells insurance to these troubled companies, not simply handouts. 
  • Eliminate the capital gains tax, like Singapore and China.
  • Reduce the corporate income tax rate to compete with the global economy and draw companies TO the US rather than to other nations with lower tax-rates.
  • Repeal Sarbanes/Oxley.

Sounds like a conservative, market-oriented solution.

Another market-oriented solution is put forth by talk-show moneyman Dave Ramsey and his “Common Sense Fix” which would be considerably less expensive than the bailout plan and reassure the American people that the government isn’t simply blowing their money away.

{ 1 comment… read it below or add one }

Chris September 30, 2008 at 7:48 pm

I wish more conservatives would endorse Newt’s plan. What we are seeing, sadly, is conservatives rolling over and accepting the premace of the opposition. The opposition’s premace is that the Federal Government will solve the problem. The Feds are not going to solve the problem but only make it worse. That is why private industry must be the force in the fix. I really hope these conservatives get on the ball because their lack of getting on the ball may have negative ramafications come November.


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