Criticism of THE Plan

Former House Speaker Newt Gingrich continues his strong criticism of the administration’s economic rescue plan.  As the politicians continue to bob and weave, I note that Washington Mutual Bank went under today with FDIC stepping in and promptly selling off assets and some locations to J P Morgan. 

Newt offered the following advice on Fox News Network (Hannity and Colmes) yesterday.

I think, first of all, they should replace the current snapshot to market with a rolling three-year average.

I think, second, they should change the current loan reserve pattern so it's not pro-cyclical.

I think, third, they should zero capital gains.

I think, fourth, they need to adopt an energy plan to keep about $500 billion a year here at home instead of going overseas.

But on a practical level, if they need to open up a window to loan money to treasury plus 2 percent, and people want to come in and borrow the money and the responsibility (ph) of a workout not a bailout, and those people want to work their way out over the next three to five years. I'm comfortable saying this is a liquidity crisis; let's meet it; let's loan the money. But let's make sure they are responsible for their bad debt, and they're going to work their way out.

This idea that we're going to buy the paper and some bureaucrat in Washington is going to be responsible for $700 billion in bad paper, I think, is socialism at its worst. I can't imagine why this administration is doing it. I think it is profoundly wrong, and I hope it is defeated if it comes to the floor in this form.

Read the entire interview with Speaker Gingrich <here>