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The 3 step bail-out solution?

On the Dave Ramsey website I found this plan. In a way it sounds very good. Maybe too good? I actually like it so far, Can you take a look at it and tell me what you see that is wrong? Could it really be this simple? Or this cheap? Here it the text of the plan. I will list the link below. The Common Sense Fix Years of bad decisions and stupid mistakes have created an economic nightmare in this country, but $700 billion in new debt is not the answer. As a tax-paying American citizen, I will not support any congressperson who votes to implement such a policy. Instead, I submit the following threestep Common Sense Plan. I. INSURANCE a. Insure the subprime bonds/mortgages with an underlying FHA-type insurance. Government-insured and backed loans would have an instant market all over the world, creating immediate and needed liquidity. b. In order for a company to accept the government-backed insurance, they must do two things: 1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage. a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes. b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile while working with the borrower—again limiting foreclosures and ruined lives. 2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages. This keeps underperforming executives from being paid when they don’t do their jobs. c. This backstop will cost less than $50 billion—a small fraction of the current proposal. II. MARK TO MARKET a. Remove mark to market accounting rules for two years on only subprime Tier III bonds/mortgages. This keeps companies from being forced to artificially mark down bonds/mortgages below the value of the underlying mortgages and real estate. b. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks—and it costs the taxpayer nothing. III. CAPITAL GAINS TAX a. Remove the capital gains tax completely. Investors will flood the real estate and stock market in search of tax-free profits, creating tremendous—and immediate—liquidity in the markets. Again, this costs the taxpayer nothing. b. This move will be seen as a lightning rod politically because many will say it is helping the rich. The truth is the rich will benefit, but it will be their money that stimulates the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down. This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, to stand up, speak out, and fix this mess. So what do you think? Here is the link to the site: http://www.daveramsey.com/etc/fed_bailout/index.html

Public Comments

1. It is not the right of the american government to tell companies they cannot golden parachute their executives. However, we should never ever ever bail out any company, and especially not companies with golden parachutes. I do not agree with government backed insurance of bad debt, thats what AIG did, and looked what happened to it. They had to raise a quarter trillion dollars overnight, and yeah, they died. However: REMOVE THE CAPITAL GAINS TAX COMPLETELY HEAR HEAR WEOOOOOOOOOOOOOOOOOOO no taxation! Save the country! Stop the reckless government spending!
2. What about those of us with a mortgage rate higher than 6% that have actually purchased a home we could afford and are not in default? Why should the irresponsible be rewarded with a lower interest rate, and those doing right be punished and pay a higher rate than the irresponsible. F@CK THAT!
3. Do it. This will help the rich initially but then again it will let us keep our tax dollars safe.
4. I like it it seems well thought out instead of what is going on now it seems like someone just pulled a figure of 700 bil out of their a** and decided that is what we will need
5. I'm against the $85,000,000,000 bailout of AIG. Instead, I'm in favor of giving $85,000,000,000 to America in a ''We Deserve It Dividend''. To make the math simple, let's assume there are 200,000,000 bonafide U.S. Citizens 18+. Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up.. So divide 200 million adults 18+ into $85 billon that equals $425,000. My plan is to give $425,000 to every person 18+ as a 'We Deserve It Dividend'. Of course, it would NOT be tax free. So let's assume a tax rate of 30%. Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam. But it means that every adult 18+ has $297,500 in their pocket. A husband and wife has $595,000. What would you do with $297,500 to $595,000 in your family? Pay off your mortgage - housing crisis solved. Repay college loans - what a great boost to new grads Put away money for college - it'll be there Save in a bank - create money to loan to entrepreneurs. Buy a new car - create jobs Invest in the market - capital drives growth Pay for your parent's medical insurance - health care improves Enable Deadbeat Dads to come clean - or else Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces. If we're going to re-distribute wealth let's really do it...instead of trickling out a puny $1000.00 ('vote buy') economic incentive that is being proposed by one of our candidates for President. If we're going to do an $85 billion bailout, let's bail out every adult U S Citizen 18+! As for AIG - liquidate it. Sell off its parts. Let American General go back to being American General. Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up. Here's my rationale. We deserve it and AIG doesn't. Sure it's a crazy idea that can 'never work.' But can you imagine the Coast-To-Coast Block Party! How do you spell Economic Boom? I trust my fellow adult Americans to know how to use the $85 Billion 'We Deserve It Dividend' more than I do the geniuses at AIG or in Washington DC. And remember, The Family plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.