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There is a provision in the sarbanes oxley law called the mark to market rule. This was passed after the Enron and WorldCom fiascos to address ethics reform. Economist Wesbury suggests changing that one provision temporarily for our current economy crisis, because it is that that is keeping our economy frozen.

He also advocates extending insurance by the federal government but no loans. If we do this, the taxpayers aren't stuck with a $700 billion debt. However, with the government backing the loans with insurance, then banks are free to loan money again and the economy can repair itself. Just because the subprime market bottomed out, it doesn't mean that the houses behind those mortgages are worth nothing. There is genuine real estate backing them up.

I believe we all should write or call our representatives and senators to back this action. Instead of spending $700 billion, Wesbury says the cost would be dramatically reduced to around $40 billion--a much more reasonable solution and accomplishes the same thing without sticking taxpayers with the debt or making them mortgage bankers.

posted 3 years, 8 months ago
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