I) The Democrat's "Home Affordable Modification" program detailed plan is diabolical. The only thing the nation was looking for in a home loan modification program is a program to get lenders to be fair and reasonable we were not looking to take advantage of them. This program takes advantage of them and moreover it is a complete deviation from the way the Democrat spokespeople and media have been saying what the program would entail. The marketing of this program has been that the program would incentivize lenders to lower a borrower's mortgage payment (meaning not only mortgage interest and mortgage principle payment but also insurance and taxes) to 38% of a borrower's income and the government for five years would pay 7% of that mortgage payment so the borrower would only have to pay 31% - an affordable amount per reasonable research. Well the details of the actual program released on March 4 would require the lender to reduce the mortgage payment to 31% (not 38%) of the borrowers income and the government for five years will pay the lender only 3.5 % (not 7.0%)of the borrowers income for five years, but this is the real wounding twist on lenders even after the lender reduces the interest rate on the loan to as much as two percent if such is necessary to get the mortgage payment to 31% only that portion of the outstanding principal at which this reduced interest rate is being applied can ever be subject to an interest rate charge for the balance of the loan term, all that remaining principle must be foreborn that is the lender will get a balloon payment for that foreborn principle amount at the end of the loan term (which could be thirty to forty years in some cases). It deserves to be emphasized that this second version of the program compared to the first version is significantly economically worse for lenders than the initial version because it is basically reducing the income stream flowing to the lender by seven percent of the borrowers income for the entire life of the loan. If one couples this 38% to 31% switch coupled with the fact that a lot of incomes used to compute the modification will be abnormally low because the nation is in either the worse or second worse recession in the last seventy-five years and many of the borrowers seeking modifications have abnormally low incomes currently so that three to five years from now when the recession is over and borrowers income are basically back to normal these loan modifications are going to look like the borrowers got a sweet heart deal at the lenders' expense. What also has to be a grave concern to loan servicers about this program is that once they participate in this program for one loan they are obligated to participate in this program for every loan they service. Furthermore, any bank that takes TARP (Troubled Asset Relief Program) money has to participate in this program for all the loans they own. In addition, any loan servicer in this program on all loans they service whether or not the loan is in this program or not in this program will be legally obligated to pursue foreclosure prevention options other than this program for a loan that is in default including a short sale, a deed-in-lieu of foreclosure or mechanisms unknown which the Treasury comes up with; it appears the government is releasing borrowers from their duty to make a good faith effort to perform on their loan contract it is giving borrowers the green light to game the system at the lenders' expense. Another serious problem with this program is that it does not screen out borrowers who have an overall debt load (that is not just mortgage debt but auto loan debt, credit card debt, etc.) which is completely unmanageable and will eventually cause them to default on the modified loan; on this issue the program only mandates that borrowers with an overall debt load of 55% of income get financial counseling - this will end up just stretching out the financial bleeding of lenders in their loan portfolios over time which is an instability the nation does not need as borrowers succumb to their overburdening debt over time. The bottom line is that any loan servicer that has a drop of good judgment shouldn't want anything at all to do with this "Home Affordable Modification" program likewise any bank that has a drop of good judgment shouldn't want anything to do with the TARP program (which is extremely bad for America because the nation needs banks to be flush with capital to lend) which would mandate participation in this "Home Affordable Modification" program. This is because participating in this program will cause them to lose an enormous amount of money and the program isn't fair toward borrowers' interests. If the government is interested in fixing this program to make it good do the following. The mandate should be the lenders reduce the mortgage payment to 38% not 31% of a burrowers income ("BI")- like the administration's original sales pitch on the program; modify the governments mortgage payment stipend so that the government pays to the lender 7% of "BI" the first & second years, 5% the third year, 3% the fourth year and 1% the fifth year (by 2011 the nation should be out of the recession and incomes should be rising one would thing by at least 2% a year a conservative figure on historic inflation rates) and therefore the borrower's mortgage payment per year is the difference between the government stipend and the 38% of "BI" figure. Moreover, don't mandate loan servicers and banks who participate in the program modify every mortgage in their portfolio even when it is clearly unreasonable, that is, allow discretion when the borrower's overall debt load is sixty percent or greater of the borrower's gross income - an added benefit is that this condition would give borrowers leverage in negotiating with some of their other creditors about lowering their debt. Lastly, drop the mandate that loan servicers that participate in this program are obligated to pursue alternative foreclosure options other than this "Home Affordable Modification" program when a loan is in default, this mandate threatens a lender's interests too greatly. II) The initiative in the "bankruptcy home loan cramdown" bill permanently lifting the ceiling on insurance levels on bank deposits to $250,000 from $100,000 is a terrible idea. This will just dramatically permanently increase the costs on the FDIC (Federal Deposit Insurance Corporation) that it incurs when one of its banks fails and this is an unnecessary increase in their costs. It is very easy for depositors to keep their deposit level in a bank below $100,000 so they won't lose any money if their bank fails they just need to spread out their deposits among multiple banks. This initiative matters because it is the nations banks that ultimately pay the costs of the FDIC making depositors financially whole to the covered amount when a bank fails, the nations banks pay this cost through a charge assessed by the FDIC on the total amount of insured deposits a bank holds and quite relevant is just this year it was raised from 6 cents to 12 cents per one hundred dollars of insured deposits (essentially a one hundred percent increase) permanently and in addition an eight cents per one hundred dollars of insured deposits charge was added this year on an emergency basis. The impact of this "charge on bank" increase is that it reduces the amount of capital banks have to lend and to pay depositors as interest on the monies they deposit in their accounts. Causing an impairment on banks in their lending capacity and in their ability to attract deposits by offering competitive interest rates isn't good for America. Because the nation will likely be in a recession for at least most of this year, if the Congress and the President want to extend the temporary lift in bank deposit insurance to $250,000 for another year to December of 2010 that would be a great idea. If the Congress and the President want to permanently increase bank deposit insurance protection to $250,000 for bank deposits for small businesses so they don't have to worry about losing their operating income in their bank account if their bank fails which would put them in jeopardy of having to enter bankruptcy that is a great idea. If Congress and the President want to permanently increase the FDIC protection on bank accounts across the board from $100,000 to $125,000 per account under the principle that this insurancelimit should somehow take into account inflation and inflation has risen since the last time the limit was set that would be legitimate. But this permanent across the board lift to $250,000 for FDIC protection is a bad idea it represents bad government it represents government making decisions that provide a good sound bite on TV news shows but is bad public policy. III) In this "bankruptcy home loan cramdown" legislation, Congress should insert provisions allowing credit unions to increase their commercial loan lending to 17.5% of their assets from 12.25 % the current law mandate. It is a no brainer here. Almost every day in the media the America people here of a story where a small business owner can't get a needed loan because America's credit system is in a failed state. America's credit unions are in a great state to pick-up the slack from our nation's ill banking system in making loans to small businesses because their financially very sound plus they are not going to be subject to the very stringent and conservative lending guidelines that many banks will be under as their managers and regulator's try to lift them to strong health. Lifting this ceiling on credit unions commercial lending in this manner would empower credit unions to help small businesses. Congress shouldn't raise the limit to 20% like many in America are calling for, a five percent increase should be enough it will provide commercial borrowers in America with significant more borrowing opportunities, any more increase and the nation is taking an undue risk because certain types of commercial lending can be very dangerous such as commercial realestate lending such lending has a history of being very cyclical often boom or bust exists. It needs to be remembered that in the 1980's America had its "Savings and Loans" lending institutions get into financial trouble costing American taxpayers a fortune to fix; twenty years later, that is now, we have our comercial banks in financial trouble costing the American taxpayer a fortune to fix; America doesn't need twenty years in the future America's credit unions found to be in financial trouble and costing the American taxpayer a fortune to fix. . IV) The Democrat Party's intiative on "Cap and Trade" legislation to stop global warming is a frightening idea. This is because their top priority about the whole plan is wrong it is to raise money (an enormous amount at $646 billion) and the money will come out of American businesses' and American consumers' pockets, the top priority alone be to protect the environment in a fiscally responsible manner. It is a real tragedy the Democrat Party's framework on this legislation because they are destroying a good idea requiring polluters to buy permits to pollute to persuade them to reduce their pollution. A good legislative scheme in this area would focus on where are the major sources of pollution in the country what viable responsible options exist if any from a technological standpoint to meaningfully reduce pollution in these areas and if possible responsibly create financial incentives to implement such options. For instance, the power generatoring industy that uses coal power is the biggest source of CO2 pollution in the nation but the nation can't expect the all the companies in that industry to immediately sequester the CO2 they produce it is not scientifically clear that their exists the technology to do that nor is there the resources in our nation to carry out such a mission. The polution mandates have to be realistic and they should be set by professionals in the field not politicians, there needs to be a board set-up that prudently manages over decades of time this transition for our nation. Morover, the legislative scheme should block penalizing polution activities just because they polute (that would just make the legislation a mechanism by which the government raises revenue and raises it at the expense of ordinary americans) again the mandates should always be coupled with the objective that there are readily doable human behavior changes that can be achieved to bring meaningfully pollution reduction. The other critically critically if Congress doesn't do it they are setting up America for hardship that could bring a grown person to tears is put "price controls" on the secondary sale of these permits that give polluters the right to pollute, that is right "price controls" (the phrase American business hates) if politicians with this legislatin think they are doing a good thing creating an industry where these permits can be bought and sold in a completely free market manner they are making a king size mistake there will be catastrophic economic problems on the nation from this. The speculators on these polution permits will drive up these permit prices without any regard for the American consumer who ultimately will largely be paying for these permits and the if legislators have any doubt about this outcome look at the character of the energy speculators who nine months ago drove up the price of a barrel of oil to over $145 dollars with overall no remorse. In light of the Democrat Party's rollout of its "Cap and Trade" initiative here which has traumatized America and the fact that even a good well designed "cap and trade" piece of legislation will have an economic impact on certain of American businesses and the American consumer, politicians should shelve this initiative until 2011 where hopefully America's economic recovery will be well underway and American business and people will be in a better position to absorb this initiative. It is irrelevant to the issue of whether or not the nation should currently proceed on this cap and trade initiative that the Democrat Party was planning to use the monies from this legislation to pay for their univerasal healthcare initiative. This "cap and trade legislation" gimmick for raising funds to pay for universal health care in America would only provide funding for a limited amount of time therefore one day in the foreseeable future America would have to fund universal health care without this source of funding so America should proceed now with its pursuit of legislation providing universal health care without this funding source. V) America's securities, commodities and financial industries need major new regulations to stop the catastrophic harm that America and the World has seen over the last two years in these industries and the Democrats are going about it all wrong the final product here will be mush and be a flawed effective product. The Democrat Party plan is to let the Congressional committees come up with the regulations necessary to have these industries run right and not harm our nation or any nation's economy. Elected members in Congress are so influenced by lobbyist the nation has practically no chance of getting fully effictive pieces of legislation passed in this area; look at this "bankruptcy home loan cramdown" legislationit has been a hellish struggle to try to get this legislation passed because of lobbyist when this legislation should have sailed through Congress to passage - it only applies to past home loans, the new home consrtuction industry a super vital sector to the economy is setting records for the bad shape it is in and this is because there is little demand for new homes because of the foreclosure crisis is flooding the real estate market with supply of homes for sale, and cramdown is a standard and fair mechanism used to handle secured credit in bankruptcy. The Democrats need to establish a 9-11 type of commission with talented and wise experts to develop a report that lays out all the problems here and recommends solutions and fully analyzes the problem and describes what legislation that solves the nation's problems in this area should look like. No one in Washington seems to be saying the right things in this area. Like, the nation should ban credit-default swaps because they cause huge capital swings for businesses that sell them swap parties lose billions in a day and it is such a ludicrous creation the debt instrument being protected through the swap can be in completely good shape but the credit rating of the swap issuer gets downgraded and the swap issue has to turn over billions of dollars to a swap holder. A credit-default swap is insurance it should be treated like such where the premium levels reflect the size of the potential claim the seller may have to pay out on and sellers should be required to keep reserve levels where paying a claim won't affect their financial stability. The whole swap vehicle as it has been known needs to be banned it creates too much fluctuations in business entiities well-being that get involved with them. Speculation in the commodity markets has to be controlled better than it has in the past the current situation with commodity speculation rises commodity price too greatly it causes to much hardship to ordinary people it is not justifiable. Hedge Funds and Private Equity funds have to be regulated in their leverage level in their investments the nation needs to stop seeing the asset value of these funds taking devastating hits in short periods of time passing on that devastation to their investors. Regulation of pension funds has to be better, the nation needs to stop seeing ten plus billion losses in one year from numerous individual public employee pension funds which require taxayers to make up the losses. Conclusion: The Democrat Party is doing a really bad job leading America on economic matters. One could start with listing the $787 billion economic stimulus bill that was weak on economic stimulus because it unduly focused on social spending, and the 2009 omnibus spending bill that increases the spending twice the inflation rate and the 2010 budget bill that has double digit percentage increases in many areas which reflects an obliviousness to the nation's super serious budget deficit state the nation is in and the "cap and trade" legislation that would stick America's businesses and people with a $646 billion bill. One could list this unfair to lenders "Home Affordable Modification" program just initiated. One could mention their opposition to following the expert committee's recommendation to raise the gas tax ten cents per gallon and put the tax on an inflation index (to help solve the country's desperate road and bridge construction needs) because they say they don't want to put a financial burden on American families when the actual cost is only about $37 dollars/car over the first year and their response that tolling more roads is the answer that is right tell the America people they going to have to pay to use non-major public roads - they should tell the truth and say they are not supporting the tax increase because they don't want to be exposed to criticism they raised a tax next election cycle even though it is over whelmingly compellingly the right thing to do. One could mention their opposition to federal dollars going to paying for school vouchers even when the alternative to the voucher is putting children in failed schools. One could mention their commitment to drive the union version of the Employee Free Choice Act through to law which will cause millions of Americans to be forced against their will to join thug and totalitarian run unions and allow arbitrators to take away the ownership rights of business owners - this is another piece of legislation where the Democrats take a good idea and chop it to pieces - this legislation should accomplish only two basic goals hammer management that mistreats employees over their pursuit of a union and have non-binding arbitration between management and a union over a labor contract not too long after a union is formed to avoid management basically indefinately stonewalling a union over a labor contract and it is to be nonbinding arbitration because such doesn't deprive business owners from any of their rights and it gives union leadership the mechanism to lead their rank and file members to forcing a good labor agreement to be reached with management; the card check initiative is an horrendous initiative why doesn't Congress just write into the bill its okay for unions to coerce workers into joining their union; secret ballots are the best means for giving workers the right of free choice on whether or not to join a union. This is the memo that members of the Democrat Party in Washington need to get. It is not acceptable that the Democrat Party advance its social agenda at the expense of doing the right thing. The Democrat party better start being good leaders on matters of economics. Many Americans are losing patience with your bad leadership on economic matters. Americans are not going to standby and watch as you ruin America for generations to come if not permanently. You have at most weeks not months to have a conversion experience and get on a different and good path compared to the one you have been traveling. If you don't your'e going to find yourself in a war and it won't be a nice sanitized war with smart bombs where the damage is contained we're going to square off our battleships toward you and unleash all our guns continually until this liberal and lousy leadership Democrat threat to America is no more. The sad thing about this whole affair with the Democrat party and their performance is that most at least Americans want the middle class, workers and those with little voice in America to have their champion to insure these groups get treated fairly in America but they need a virtuous and skilled champion not the current Democrat Party which is virtue and skill depraved.