By Orion Daley
Dear Congress People:
As an alternative to the US Government having to absorb up to $1 Trillion in questionable bad paper from Wall Street, I ask you to consider what I see as a viable alternative.
This will, more than likely, than otherwsie, prevent the American Tax Payer from having to absorb this debt, and obviate the need to write callable bonds to foreign investors for it. In the mean time, it allows institutions on Wall Street a liquid path for addressing their liabilities.
Please consider the following: It is about a straw man for an investment vehicle. It is intended for any institution in question that could affect the over all fabric with its counter parties from its own exposure.
Although the US Treasury is not willing to lend a hand in such cases, I believe a workable solution can help off set liabilities to improve the bottom line of the firm, and if needed, for potential buyers .
As every transaction is taxed, netting is used as a means to average these obligations on a daily bases. This is for billions of US dollars in our banking systems.
Consider , that for a period of time, with government consent, if taxes which are to be paid quarterly to the federal and state governments, are to be invested instead in a non taxable capital markets fund that are managed by the institution. Payment into this fund is to be based on the daily netting amount.
Over time, the non taxable investment fund will build on its own due to its profits in addition to a quarterly based payment by the institution.
When the fund investment reaches 4 times is original starting value, or the average quarterly netted taxes, then 25% of this will be applied to taxes and 75% maintained in the original fund for capital market management.
At this point, those profits that are made on the fund are to remain in it, and the quarterly tax on the following quarter, for the previous one are to be applied to actual quarterly tax.
Hence, for a period of time, this is in effect, having the government making a non interest based loan for taxes owed while the institution can put the money to work.
The Treasury is not lending tax payer dollars for a bailout , but is allowing the firm latitude for building assets to balance its liabilities.
As this 75% grows it is to replenish the 25% periodically. When the 25% actually exceeds the normal quarterly tax, this overflow can be applied toward firm liabilities, and the original 25% applied toward quarterly tax.
At this point, in switching 180 degress, the 75% can then be considered an invenstment on behalf of the government which it can borrow against as is needed.
Orion Karl Daley
Presidential Candidate for 2008
Author - The New Deal ISBN: 1419670948
for the Strategic Future of our nation
Balanced Party http://unity2008.org
New York, NY, USA -