Keep Bailing
Now that our elected officials have promised around $2 trillion dollars, they need to fix the root causes of the current credit crisis. Here are five great suggestions from The Detroit News:
- Disband Fannie Mae and Freddie Mac. The main cause of today’s problems.
- Deregulate (yes, deregulate!) financial institutions so that investors bear all the risk. Not taxpayers.
- Make sure current promises are kept – bank insurance, Social Security, Medicare, etc. I’d like to see the government out of some of these, phased out gradually. But we can’t just eliminate these programs. Yet.
- Eliminate mark-to-market accounting. This rule add to the volatility of the market.
- Force capital requirements for all financial institutions to match their risks. Fannie and Freddie don’t have this requirement.
These reforms are necessary, otherwise the government will be handing out another trillion dollars of our money.
