As I have followed the news concerning the banking bailout and read about the supposedly "better" bailout plan that is currently being considered, I came to the conclusion that since I don't have a degree in economics and have never served in any government capacity I could craft a bill to handle the mortgage crisis that is at least as bad as what is currently on the table but do it in one page in terms that everyone can understand. Here goes:
- The US Treasury shall make available funds in 100 billion dollar increments that can be loaned to these irresponsible financial institutions at some low interest rate.
- Any institution that accepts these funds agrees to the following for eligibility:
- If the institution still fails (as it should), all its assets shall be processed through bankruptcy court like any other bankrupt institution.
- All bonuses that would normally be given to an irresponsible * executive when he is fired, leaves or destroys the company are void.
- Until the loan is paid back, no executive level employee will be given a bonus.
- The institution will no longer offer any ARM products.
- Additional funds will be available in 100 billion increments if passed by a super majority in both houses of Congress.
- The Community Reinvestment Act is repealed.
- All mortgages created in the future in the US will require the following if the bank wants its assets to be insured by the government:
- Proof of borrower's legal status in the United States
- Proof of borrower's income
- Proof of property value
- Race-blind processing
- A joint congressional oversite panel will be created that will be responsible for producing a semi-annual report detailing what institutions received loans and what progress they are making paying them back. This report will be understandable by anyone who has ever created a budget. If it is not, the panel will be locked in a room with Bill Maher and Anne Coulter until such a document is produced.
* Irresponsible in this case is defined as any executive working at one of these financial institutions. This should probably be extended to include Congress but it is doubtful the bill would pass if it did.