Non Socialist

By INVESTOR’S BUSINESS DAILY | Posted Thursday, October 23, 2008 4:20 PM PT

Socialism: With Congress eyeing 401(k)s and Barack Obama decrying “corporate greed,” it might pay to look at Argentina’s pension nationalization.

The country’s mediagenic socialist president, Cristina Fernandez de Kirchner, announced Tuesday the state would “protect” private pensions from “policies of plunder” by proposing to hand them over to the government.

Praising her own scheme, she claimed Argentina would “set an example” for global financial crisis management by pulling $29.5 billion out of the private sector, and making it public.

As aghast as Argentines are about this, Americans should be too, because a Democratic supermajority in Congress would have similar ideas about nationalizing 401(k)s.

The country’s mediagenic socialist president, Cristina Fernandez de Kirchner, announced Tuesday the state would “protect” private pensions from “policies of plunder” by proposing to hand them over to the government.

Praising her own scheme, she claimed Argentina would “set an example” for global financial crisis management by pulling $29.5 billion out of the private sector, and making it public.

As aghast as Argentines are about this, Americans should be too, because a Democratic supermajority in Congress would have similar ideas about nationalizing 401(k)s.

In Argentina, the socialization of savings represents a major dismantling of 14 years of privatization and individual rights, reforms that decisively ended Argentina’s dark years of hyperinflation and dictatorship.

Starting in 1994, Argentinians could choose to save for retirement with the state or through a private account that let them make investment decisions based on their retirement needs.

Although it tried to accomplish what Chile’s private retirement accounts did, it wasn’t as well-designed. Fees were 30%. The government rigidly dictated what assets could be held in the accounts. But millions of Argentinians chose them anyway, because it gave them ownership.

(Excerpt) Read more at ibdeditorials.com …

http://www.ibdeditorials.com/IBDArticles.aspx?id=309653051843388

http://thehill.com/leading-the-news/with-economy-in-shambles-congress-gets-a-raise-2008-12-17.html

Washington, D.C. – Speaker Nancy Pelosi issued the following statement this morning after the Department of Labor released its employment report for October showing a loss of another 240,000 American jobs, bringing the total number of jobs lost this year to 1.2 million, and a 14-year high jobless rate of 6.5 percent: 

“Today’s announcement that America has lost more than 1 million jobs this year underscores what working families already know: the Congress and the Bush Administration must take swift action to boost the economy, create jobs and help struggling Americans.

“The House has already passed strong economic recovery and job creation legislation in September.  Today’s economic news should send a clear signal to Republicans in the Senate and to President Bush that they must join us in an effort leading economists agree is critical.

“We will also continue our dialogue with America’s automakers and the United Auto Workers in the coming weeks to safeguard the interests of American taxpayers, protect hundreds of thousands of workers and retirees, and use cutting-edge technology to transform blue-collar jobs to green collar jobs for generations to come.  For our economic and national security, it is essential that we preserve our manufacturing and technology base.

“We can create good-paying jobs here at home, provide relief to struggling families and small businesses, and take action to make America more competitive in the 21st century global economy.  It is time for a Main Street Recovery.”

Watching the early voting and some of the comments coming from the electorate I and forced to wonder how we made it this far in just over 225 years with out killing our selves; High school kids in the south Bronx “Obama has opened doors for us” really what has he done? Woman in Florida I voted for Obama because I won’t have to pay for gas or the mortgage on my home anymore. Well don’t tell the mortgage company that, but go ahead and stop paying say for 3 months and see how fast Obama saves you.  As a side note if you make over $43,000.00 you wont qualify for the 700 billion dollar bailout.  Another Gentleman for Florida voted for Obama because he wants some of the money.  What money the treasury is broke.

This is the way I see it, if Obama is elected.  Taxes will go up for everyone across the board. The Bush tax cuts will expire. In turn the will lower the tax bar back down where it was under Clinton, from 10% base to 15% of taxable income between $0.00 to $12,000. http://www.moneychimp.com/features/tax_brackets.htm

The Federal treasure has received more monies under President Bush after the tax cuts then before under Clinton.  Obama during the debates stated he didn’t care about more money going into the treasury; he is going to do what is fair.

Blacks and other minorities will party hard for the first few days, and then reality will set in.  Obama already knows he cant fulfill his promises, so what will happen?  We will be strapped with a white Democrat congress, it will be there fault the blacks aren’t getting there money.  Under the Construction that would be correct however, this is completely different.  This will be the whites in congress keeping the blacks down.  The minority community has been so trained but Democrats to expect something for nothing that Obama will end up setting us back in race relations to the 1950’s.

The republicans have always supported a diverse community as long as you contributed.  President Jefferson under the republican-democrat party (later became the Republican Party) used the Navy to intercept slave ships and arrest them as pirates. We have Lincoln with the emancipation proclamation, and Eisenhower with the civil rights act.  All these Presidents were fought by the Democrats.  The new deal under FDR has completely destroyed the Black Family. With out a work ethic you will always be second class citizens.

Bottom line if Obama is elected all the problems will be because we have a white congress and that congress will be demacrat.

To halt Syrian support for terrorism, end its occupation of Lebanon, stop
its development of weapons of mass destruction, cease its illegal importation
of Iraqi oil and illegal shipments of weapons and other military
items to Iraq, and by so doing hold Syria accountable for the serious
international security problems it has caused in the Middle East, and
for other purposes.

H.R. 1828 108th Congress

“While I did not support this bill, I do believe that action is needed.

Measures like allowing U.S. companies to repatriate overseas capital without penalty and suspending the capital gains tax, rather than flooding the market with taxpayer money, are preferable ways to create liquidity.”

Press Release

Contact: Tom Dunn

October 3, 2008

520-481-7919

Statement on today’s bail-out

When Congress had a chance to stand up and do the right things for the American people, they didn’t.  The proposed bail-out couldn’t pass earlier this week.  Ms. Giffords voted against it because she wanted “adequate taxpayer protections” and complained that the legislation was rushed. 

Well, this new legislation epitomizes the systematic problems in Washington.

Instead of addressing the crisis and passing sensible legislation that would protect the taxpayer and not bail-out Wall Street on the backs of Main Street, a broken Washington saw an opportunity.

Washington (and the incumbent) seized an opportunity to pile on the American taxpayer.

They added pork for wooden arrows, racetracks, rum, bicyclists, and Hollywood studios to name a few. 

Our Congresswoman Giffords wouldn’t stand by and say “no!” to the pork.  She added her own.  I support the extension of the solar tax credits.  These are tax credits that are important, but can pass on their own without bailing out Wall Street. Her vote to roll over taxpayers was bought with tax credits that a real leader would have passed months ago as part of an all of the above energy package.

 This bill should be about protecting our taxpayer, stabilizing our markets and strengthening our economy.  It should not be about how much more pork barrel spending you can get away with.

Southern Arizonans deserve someone that will stand up for them and do the right things. 

www.TimBee.com

###

Paid for by Tim Bee for Congress

Thank you for contacting me about the financial stabilization bill that has been under consideration in Congress. The circumstances surrounding House and Senate action on the legislation have been evolving so rapidly that I thought it would be best to wait to respond until the situation had become clearer. As you know by now, the Senate approved the stabilization bill on October 1, the House followed suit on October 3, and the President signed it into law the same day. So, now is a good time to pause and report back to you.

As you can imagine, this legislation has prompted large numbers of Arizonans to contact my office, and most have expressed concerns about the measure. Many of the specific concerns have now been addressed, and I will describe those changes later in this letter.

Many constituents have been led by the media to believe that the measure is a “bailout” of Wall Street. While it is true that the Treasury and Federal Reserve engineered bailouts of Bear Stearns, insurer AIG, and Fannie Mae and Freddie Mac several weeks ago, the economic stabilization bill addresses a different problem in a different way and is not a “bailout.”

The problem the bill seeks to address is the decreasing availability of credit which was brought on by overinvestment and speculation in home buying. Plummeting home values have left many homeowners with mortgages that exceed the market value of their homes, making it uneconomical for them to sell and making it impossible to refinance their adjustable rate mortgages into more affordable loans. As a result, many people have become delinquent on their mortgages and, in many cases, have entered foreclosure.

The financial institutions holding those troubled mortgages have, in turn, found themselves unable to collect on those mortgages or resell them to other investors, even when packaged with mortgages that are being paid in full and on time. Because these assets cannot be liquidated, the banks holding them have all but stopped lending money to consumers and businesses as they try to preserve their capital.

The Credit Crisis

Like it or not, most of our economy runs on credit, and if it’s not available, economic activity can grind to a halt. Most families cannot afford to buy a new car or a refrigerator (let alone a house) with cash.

The credit crunch that is affecting our economy started several months ago, but has accelerated in recent weeks. The Arizona Republic reported on October 1 that “many small businesses can’t get funding for supplies and in some cases are falling behind on their payrolls.”

In an editorial the following day, the Republic noted that “Arizona business leaders report they are seeing entire lines of credit evaporate.” A USA Today poll in August found that 67 percent of businesses felt a credit crunch, up from 55 percent in February. In the last two weeks, the municipal bond market has seen rates more than quadruple, thus effectively drying up their credit and forcing cities across the country to abandon projects. The Arizona Mortgage Lenders Association has cited examples of consumers losing their home equity lines of credit.

The Arizona Republic reported on October 2 that automobile sales are down sharply: down 34 percent for Ford, 32 percent for Toyota, and 16 percent for GM. Vehicle sales in Arizona are down 23 percent compared to a year ago.

If the credit crunch persists, mortgages will get more expensive. The required down payment for FHA-insured loans is already set to increase from 3.0 to 3.5 percent on January 1. Other lenders might also require higher down payments or higher interest rates and monthly payments.

Without access to affordable credit, manufacturers will begin to find it difficult to finance the acquisition of raw materials or new equipment, or even meet payroll. Farmers won’t be able to finance the large upfront costs associated with purchasing fertilizer and seed to plant their crops. Small businesses will not be able to get funding to extend credit to their own customers who wish to make everyday purchases. Private loans for college could dry up.

I have already begun to hear from many constituents who are being affected by the credit crunch, mostly small business owners who create a majority of new jobs.

What all of this indicates is that the credit crunch is spreading to Main Street and threatens severe economic disruption. Even the state’s resources are at risk. The State Treasurer in Arizona reports the potential loss of millions of dollars from state-backed investment pools.

Restoring the Proper Functioning of Credit Markets

For those of us who fervently believe in the virtues of a free-market economy – where businesses succeed and fail based on their appeal to consumers, the soundness of their business practices, and accountability to their shareholders – the idea of government intervention to try to fix the credit crisis is not an appealing one. But the larger economy is facing a serious emergency, and I believe some kind of bold government action is both necessary and urgent.

After being briefed by the nation’s top economic advisors, and after consulting with officials and business and community leaders in Arizona, I concluded that the stakes are simply too great not to support the economic stabilization legislation. Too many Arizonans could lose their jobs, too many businesses could be forced to scale back or close, and too many homeowners could be forced into foreclosure.

The federal government used none of the fiscal or monetary tools available to it to avert the Great Depression early in the 20^th Century. In fact, it implemented many policies – raising taxes, imposing steep tariffs, and reducing the money supply – that proved to be exactly the wrong things to do as the country was heading into an economic slowdown. The country suffered through a decade of hardship as a result: the economy contracted by nearly a third, unemployment exceeded 25 percent, business investment declined by 83 percent, and incomes fell by 21 percent.

It’s important that we heed the lessons of history, not repeat the serious mistakes that were made.

In short, failing to take appropriate action now could result in an economic catastrophe unknown in our lifetime. That is not a risk I am willing to take with the economic security of hard-working citizens of our state and country. The day that the House of Representatives defeated the first financial stabilization bill, the market lost an estimated $1.2 trillion in value, reducing by 10 percent the value of retirement accounts, pension funds, and the personal savings of millions of Americans. Unless the credit problem is addressed, economic turbulence will continue to erode our economic well being.

The Federal Reserve has already taken a number of steps to avert the crisis, but, as Treasury Secretary Paulson said recently when he promised to use all the tools available to protect our financial system, “our toolkit is substantial but insufficient.”

The Secretary and many other experts (including some I personally know and respect) believe that the most effective way for the federal government to help restore the orderly functioning of credit markets is to buy mortgage-backed and other distressed securities that are clogging the balance sheets of financial institutions, and thus inject needed liquidity back into the financial markets.

The securities that the government would acquire have intrinsic value, although that value is almost impossible to determine today because of the state of the housing market. Think of your own home: you might believe it’s worth about $200,000. But you’d be hard pressed to sell it at all in today’s market. If you had no choice but to sell, you might be satisfied with $150,000, but if you could wait until the market recovers, you might get the full $200,000 that you’d like. The same is true with respect to the mortgage-backed securities held by troubled financial institutions.

The Financial Stabilization Bill

The core concept of the financial stabilization bill is to allow the Treasury Department to purchase up to $700 billion of these mortgage-backed and other distressed securities from financial institutions (at a price analogous to the $150,000 for your home in the example above), hold those assets until the market recovers, and then resell them at a later date, hoping to recoup the investment. (Only the federal government has the ability to buy and hold these assets for the amount of time it will take for the markets to recover and return sufficient value to the taxpayers.)

More specifically, Treasury Secretary Paulson is proposing to have the government purchase many of these mortgage-backed securities through a reverse-auction process.  That is, holders of the securities would offer them for sale to the government at a discounted price, and, because institutions would be competing against one another to sell to the government, they would have every incentive to fairly value the assets.  Once the auctions begin to establish prices for the securities, the private sector will gain greater confidence in their value and reenter the market for them.  All of this will help unlock the capital of financial institutions and make it available for lending again.  Ultimately, when the market recovers, the government would sell the assets it acquires at a fair price, hoping to recoup what it paid, but at least minimizing losses to the taxpayer.

Congressional leaders, responding to concerns that people, like you, had expressed, worked with the Treasury Department to produce a modified version of the bill that would provide more accountability, transparency, and oversight, and add new taxpayer protections. Changes were made to:

** Provide better oversight: The bill would create a Financial Stability Oversight Board to enhance oversight of the program and ensure that assets are acquired at the best price for taxpayers.

** Better protect taxpayers: The bill would help protect taxpayers against potential losses, among other things, by prohibiting the Treasury Secretary from purchasing troubled assets unless he receives stock options from the firms selling those assets. This will allow taxpayers to share in the firms’ future profits (when the economy recovers) in exchange for the risk taken by the government now. After five years, the President would also be required to provide Congress with a report on how to recoup any losses that the program has incurred.

** Dedicating revenues to debt reduction: The bill would require that any amounts recovered by the government from the resale of assets be used to reduce the national debt.

** Ensure that executives of troubled institutions do not profit from the government’s asset acquisition plan: Many chief executives of troubled institutions have already been fired, along with their boards, and the FBI and Securities and Exchange Commission have initiated criminal investigations into wrongdoing. The financial stabilization bill further limits executive compensation and golden parachutes for executives who participate in Treasury’s troubled asset program.

After the House of Representatives failed to pass the bill on September 29, the Senate made the following additional changes:

** Increased protection for savers: The Senate bill would increase the federal deposit insurance limit from $100,000 to $250,000 to help maintain confidence that individuals’ savings are safe and secure.

** Regulatory reform: The original bill would allow the Securities and Exchange Commission to suspend so-called “mark to market” rules that had artificially undervalued the assets held by financial institutions and worsened the credit crunch. (Senate action was accompanied by an announcement by the SEC on September 30 that it was taking a step in that direction by issuing a clarification to give banks more flexibility in valuing their assets.)

** Tax relief: A separate bill to stop the Alternative Minimum Tax (AMT) from hitting some 25 million Americans with an estimated $2,000 tax increase passed the Senate on several occasions earlier this year with broad, bipartisan support, but had not passed the House. To make sure the AMT fix is enacted before the next tax-filing season, the Senate added it to financial stabilization bill. The measure also extended a series of other expiring provisions of existing tax law.

Unlike an early draft of the legislation, the final version of the bill includes no taxpayer funding for special interest groups, like the Association of Community Organizations for Reform Now, better known as ACORN. Many people believe that ACORN helped pressure lenders to extend mortgages to people who could not afford them, helping to precipitate the credit crisis. And contrary to some reports, there were no pork projects or special spending earmarks added to the bill to buy Members’ votes.

I hope this gives you a better idea of my rationale for supporting the bill. Others opposed it, some arguing it didn’t include this or that provision they favored. I, too, would have liked to add other provisions. But, it is important to remember that members of the Majority Party wanted very different provisions (like the funding to groups, like ACORN) that, in my view, would have been very bad. The necessary compromise was to leave out our respective political agendas and stick to the bare bones needed to get credit markets unstuck at the least cost to the taxpayers.

I should also say that even if this program works as intended, our economy will likely continue to languish for other reasons. Congress and the new administration will need to address some of those issues and longer term regulatory issues in the future.

If you have any additional comments or questions, please let me know, and I will be glad to respond.

Sincerely,

JON KYL

United States Senator

A prominent Philadelphia attorney and Hillary Clinton supporter filed suit this afternoon in the U.S. District Court for the Eastern District of Pennsylvania against Illinois Sen. Barack Obama, the Democratic National Committee and the Federal Election Commission. The action seeks an injunction preventing the senator from continuing his candidacy and a court order enjoining the DNC from nominating him next week, all on grounds that Sen. Obama is constitutionally ineligible to run for and hold the office of President of the United States.

Philip Berg, the filing attorney, is a former gubernatorial and senatorial candidate, former chair of the Democratic Party in Montgomery (PA) County, former member of the Democratic State Committee, and former Deputy Attorney General of Pennsylvania. According to Berg, he filed the suit–just days before the DNC is to hold its nominating convention in Denver–for the health of the Democratic Party.

“I filed this action at this time,” Berg stated, “to avoid the obvious problems that will occur when the Republican Party raises these issues after Obama is nominated.”.

Berg cited a number of unanswered questions regarding the Illinois senator’s background, and in today’s lawsuit maintained that Sen. Obama is not a natural born U.S. citizen or that, if he ever was, he lost his citizenship when he was adopted in Indonesia. Berg also cites what he calls “dual loyalties” due to his citizenship and ties with Kenya and Indonesia.

Even if Sen. Obama can prove his U.S. citizenship, Berg stated, citing the senator’s use of a birth certificate from the state of Hawaii verified as a forgery by three independent document forensic experts, the issue of “multi-citizenship with responsibilities owed to and allegiance to other countries” remains on the table.

In the lawsuit, Berg states that Sen. Obama was born in Kenya, and not in Hawaii as the senator maintains. Before giving birth, according to the lawsuit, Obama’s mother traveled to Kenya with his father but was prevented from flying back to Hawaii because of the late stage of her pregnancy, “apparently a normal restriction to avoid births during a flight.” As Sen. Obama’s own paternal grandmother, half-brother and half-sister have also claimed, Berg maintains that Stanley Ann Dunham–Obama’s mother–gave birth to little Barack in Kenya and subsequently flew to Hawaii to register the birth.

Berg cites inconsistent accounts of Sen. Obama’s birth, including reports that he was born at two separate hospitals–Kapiolani Hospital and Queens Hospital–in Honolulu, as well a profound lack of birthing records for Stanley Ann Dunham, though simple “registry of birth” records for Barack Obama are available in a Hawaiian public records office.

Should Sen. Obama truly have been born in Kenya, Berg writes, the laws on the books at the time of his birth hold that U.S. citizenship may only pass to a child born overseas to a U.S. citizen parent and non-citizen parent if the former was at least 19 years of age. Sen. Obama’s mother was only 18 at the time. Therefore, because U.S. citizenship could not legally be passed on to him, Obama could not be registered as a “natural born” citizen and would therefore be ineligible to seek the presidency pursuant to Article II, Section 1 of the United States Constitution.

Moreover, even if Sen. Obama could have somehow been deemed “natural born,” that citizenship was lost in or around 1967 when he and his mother took up residency in Indonesia, where Stanley Ann Dunham married Lolo Soetoro, an Indonesian citizen. Berg also states that he possesses copies of Sen. Obama’s registration to Fransiskus Assisi School In Jakarta, Indonesia which clearly show that he was registered under the name “Barry Soetoro” and his citizenship listed as Indonesian.

The Hawaiian birth certificate, Berg says, is a forgery. In the suit, the attorney states that the birth certificate on record is a forgery, has been identified as such by three independent document forensic experts, and actually belonged to Maya Kasandra Soetoro, Sen. Obama’s half-sister.

“Voters donated money, goods and services to elect a nominee and were defrauded by Sen. Obama’s lies and obfuscations,” Berg stated. “If the DNC officers … had performed one ounce of due diligence we would not find ourselves in this emergency predicament, one week away from making a person the nominee who has lost their citizenship as a child and failed to even perform the basic steps of regaining citizenship as prescribed by constitutional laws.”

“It is unfair to the country,” he continued, “for candidates of either party to become the nominee when there is any question of the ability to serve if elected.”

“The ultimate determinant in the struggle now going on for the world
will not be bombs and rockets but a test of wills and ideas — a trial of spiritual resolve: the values we hold, the beliefs we cherish,
and the ideals to which we are dedicated.”

— Ronald Reagan (1911-2004) —

http://www.americasright.com/2008/08/obama-sued-in-philadelphia-federal.html

The bailout bill also gives the Internal Revenue Service new authority to conduct undercover operations. It would immunize the IRS from a passel of federal laws, including permitting IRS agents to run businesses for an extended sting operation, to open their own personal bank accounts with U.S. tax dollars, and so on. (Think IRS agents posing as accountants or tax preparers and saying, “I’m not sure if that deduction is entirely legal, but it’ll save you $1,000. Want to take it?”) That section had expired as of January 1, 2008, and would now be renewed.

Starting with the so-called Anti-Drug Abuse Act in 1988, the IRS has possessed this authority temporarily, with occasional multiple-year lapses. A 1999 internal report said the IRS had 126 “trained undercover agents” working in field offices at the time. This is the first time that such undercover authority would be made permanent.

Sens. Max Baucus (D) and Chuck Grassley (R) have been pushing to make it permanent for a while, claiming (PDF) in April that: “Undercover operations are an integral part of IRS efforts to detect and prove noncompliance. The temporary status of this provision creates uncertainty, as the IRS plans its undercover efforts from year to year.”

There’s another section of the bailout bill worth noting. It lets the IRS give information from individual tax returns to any federal law enforcement agency investigating suspected “terrorist” activity, which can, in turn, share it with local and state police. Intelligence agencies such as the CIA and the National Security Agency can also receive that information.

The information that can be shared includes “a taxpayer’s identity, the nature, source, or amount of his income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, deficiencies, overassessments, or tax payments, whether the taxpayer’s return was, is being, or will be examined or subject to other investigation or processing, or any other data received by, recorded by, prepared by, furnished to, or collected by the Secretary with respect to a return.”

That provision had already existed in federal law and automatically expired on January 1, 2008.

What’s a little odd is that there’s been little to no discussion of the IRS sections of the bailout bill, even though they raise privacy concerns. Treasury Secretary Henry Paulson said this week: “I will continue to work with congressional leaders to find a way forward to pass a comprehensive plan to stabilize our financial system and protect the American people by limiting the prospects of further deterioration in our economy.” He never mentioned the necessity of additional IRS undercover operations.

Rescuing the Rescue Plan
Why not fund it with tax-advantaged private funds?

By Phil Kerpen

September 30, 2008 8:49 AM

The surprising congressional defeat of the Treasury’s bailout plan triggered one of the worst stock market days in history, destroying trillions of dollars in shareholder wealth.  The narrative that carried the day was that ordinary taxpayers shouldn’t pick up the tab for the excesses of Wall Street. But the half of American households that own stock may be surprised to see how much inaction costs when they read their next retirement-account statement, due soon with the third-quarter ending today.

Most members of Congress understand the gravity of the current seize-up in credit markets, but many bowed to political pressure from back home and voted against the rescue measure. Fortunately there is a solution that can solve both the political problem of putting taxpayer dollars at risk while getting credit flowing again and soothing the stock markets: Fund the rescue plan with tax-advantaged private funds.

Republicans already have signaled that the addition of tax-relief provisions to the rescue bill will bring more votes to the table — easily more than the 12 votes by which the original plan failed. Democrats, however, are sure to balk at tax cuts that bear only a limited connection to the current crisis. Tax cuts here would be seen as political opportunism, no different from the so-called affordable-housing giveaways to liberal political groups and union proxy provisions that some Democrats tried to hitch to the original bailout bill.

But the key to solving this problem is to direct the tax relief at the purchase of troubled assets.

A Treasury facility could be set up to operate exactly as suggested by the original Paulson plan. As such, it would buy troubled assets to provide markets liquidity and serve a price-discovery function. However, instead of funding the facility by selling Treasury bills that would impose a debt on future taxpayers, some or all of the fund could be constructed of capital that is voluntarily committed by private entities. And here’s the tax-cut sweetener: All funds invested in the facility for a five-year holding-period would be tax-free, exempt from the capital-gains tax, the corporate tax, the death tax, the repatriation tax, and any other tax that would otherwise apply.

Based on the number of commentators who are convinced the government will make money on this deal, the private capital would pour in. Billionaire investor Mark Cuban suggests that the new Treasury facility trade on a stock exchange as an exchange-traded fund. Cuban says that he and many others would be interested in such an investment.

The tax-exemption also would boost general investor interest by raising the after-tax rate of return of the rescue facility. With asset prices as low as they are, the Treasury facility would be a pretty good bet. This concept could even be taken a step further: Private entities could be authorized to establish in accordance with the rules for purchasing distressed assets, qualifying them for the new mega-tax exemptions and allowing them to compete with the Treasury-run rescue facility.

This solution should appeal to both the Republican and Democratic members of the House who voted no on the original rescue legislation. The major concern of these politicians has been the unpopularity of committing taxpayer dollars to an investment in distressed assets. But this new option addresses that concern by allowing the Treasury facility and its competitors to be funded by investors who see the value in purchasing these assets, all while reducing or eliminating the need for taxpayer dollars.

This compromise approach could be up and running rapidly using conventional government finance procedures, and private investment could be brought in as expeditiously as possible. And since this approach does carry the risk of creating a new quasi-government entity — along the lines of the government-sponsored enterprises that helped create the problem — it should carry a sunset date.

With the crisis spreading from the credit markets to the stock markets to Main Street, the decision to vote no may prove to do more political harm than good. But this is a way out that can both pass Congress and solve the problem, all while reducing the downside risks for taxpayers.
— Phil Kerpen is policy director for Americans for Prosperity.

 Originally appeared on National Review Online.