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The Baltimore Sun

Principles to govern a fair bailout bill

As an ordinary citizen, I would like to put forth a series of points that I feel should be the basis for a plan to deal with the immediate and systemic causes of our current financial crisis ("Credit crunch," Oct. 1).

* Bankruptcy judges should be permitted to modify the terms of a mortgage or write down the value of a loan for a primary residence that has not yet been foreclosed.

* Extraordinary effort should be made by financial institutions that own bundled mortgages to identify each and every physical property owned to minimize fraud and demand accountability for asset ownership.

* Government assistance to financial institutions in the form of assuming ownership of troubled assets should be offered at a rate of valuation below the face value of the asset so that the financial institutions also assume a burden of loss for their poor judgment. Government assistance should be offered only when the physical properties in question can be identified.

* The physical properties transferred to government ownership must be made available for immediate sale to any buyer willing to purchase the property at a price that ensures a net profit to the government.

* State and federal agencies should be given the option of purchasing newly acquired government property for their various program and space needs.

* Specifications of all property owned by the government "real estate office" should be made freely available on the Internet.

* Government assistance should be offered to all institutions, large and small, on the same terms or at the same level of financial insolvency - so that larger institutions with a large number of vocal stockholders are not at an advantage over community banks and real estate developers.

Nirali Shah, Baltimore

Let government lend directly to consumers

Those in favor of the $700 billion bailout package being debated in Congress claim it would restore capital to lending institutions who could then loan that money to businesses and consumers ("Credit crunch," Oct. 1). This, in turn, would drive the economy forward and save it from a possible depression.

While the theory sounds reasonable, it is still a dangerous proposition for the government to purchase the most risky of loans, even at a discount, from private financial institutions.

If the government needs to put our tax dollars at risk, wouldn't it be better to loan that money directly to businesses and consumers with excellent credit?

That way, capital would be restored to the economy and the risk involved in lending out billions of taxpayer dollars would be reduced.

In addition, the financial institutions whose greed created this fiasco would be forced to let the free market decide their fate.

Let's not rush to put money back into the hands of businesses that clearly do not know how to use it.

E. Mitchell Arion, Goldsboro

Pelosi told the truth about deregulation

It is very sad that House Speaker Nancy Pelosi has been castigated by some for simply telling the truth about how we got into this financial mess ("Shock Waves," Sept. 30).

The interesting thing here is that the truth she was telling was so obvious.

It certainly is no secret that we are close to economic collapse as a result of the failed policies of the Bush administration and the Republican Party.

The Republicans are always talking about the need for small government with very little regulation. This philosophy is clearly a failed one.

We do not live in a small agrarian society. Our nation is very large and complex.

We need more regulation, not less regulation. That means not just regulation of the financial sectors but also regulation of the meatpacking industry, the drug manufacturing industry, the commercial aviation industry, etc.

These industries have proved that they are incapable of policing themselves. They must be regulated for the protection of the general public.

I applaud Ms. Pelosi for the excellent job she has done in attempting to rescue the nation's economy.

I hope that she will continue to tell the truth to the American people.

We have heard enough lies and false promises.

Edward McCarey McDonnell, Baltimore

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