The Sinatra Bailout Plan
I’m a concerned US citizen who thinks the “bailout” needs far more protections so I propose the following “Sinatra Bailout Plan.” Who knows, it may actually work:
Every company that needs assets removed from their books would give up a 20% equity stake in Preferred stock to the US Government. These companies would immediately suspend dividends for 3 years to stabilize their companies and protect the taxpayer investment.
The real estate backing the loans would then be put into a protected Social Security Trust Fund (with the stipulation that it cannot be used by politicians at any time under any circumstances). These assets would be sold later to pay for the shortage in our Social Security / Medicare System.
All preferred stock would be distributed to all US Citizens 18+ at the end of each year.
These preferred shares could be sold in the stock market or held – regardless, it would put wealth back into the economy without too much inflationary pressures of sending cash to US citizens, as has been proposed.
While the common shares of these companies would be diluted to some degree, it’s far better than having these companies/banks go under.
American citizens would actually have an equity stake in the “bailout” and as these companies turned around these shares would gain value and gradually push more wealth to all citizens.
Also, as Real Estate values turn around in the years ahead, a new protected Social Security Trust Fund may actually survive (currently, the existing trust fund is empty and the only way someone in their 30’s will get any benefit is if the income tax rate increases to about 60%)
Under the Sinatra Plan, US Citizens would own a stake in this bailout and we would fix one of the most important problems facing our younger generation, the Social Security System. Under the Sinatra Plan we can turn this crisis into an opportunity.
If the assets backing the mortgage paper is allowed to go to the government, it is highly likely these assets will be liquidated by politicians to increase spending in the future. The chances these assets will be sold to repay the bailout is unlikely. It will be turned into a giant piggy bank that politicians will use for years as they spend this country into oblivion. By placing these assets in a protected Social Security Trust Fund they will not be able to touch them. Unfortunately, politicians in this day and age cannot be trusted.
This plan is more realistic than writing massive checks to the citizenry, and better than sending huge amounts of cash to Wall Street banks. It’s a reasonable plan that would actually work, but we need to spread the word quickly before our politicians create for themselves a Trillion dollar slush fund.
Send this plan to everyone you know before it’s too late…
By the way, there seems to be a push to make sure the politicians have “oversight” and “control” over these assets. Why would we want the folks who put us in this position to control anything? Those real estate assets need to be put on a high shelf where no politician can reach and a protected Social Security Trust Fund may be that safe harbor.
Jeff Sinatra, a Concerned Citizen