by Katie Favazza | July 6, 2009 6:12 pm
Last month, Sen. John Thune took to the Senate floor and cable news networks promoting his plan for the government to get out of business. His “government ownership exit plan” calls for the governments’ troops, as it were, to withdraw from the auto industry, banks, etc. in one year, by July 2010, with the possibility for a little wiggle room, pending investment growth and such.
According to Thune’s website, the plan has 4 major components, all with the ultimate goal of “restoring private ownership of private companies.”
STEP 1: Upon enactment of the legislation, the Treasury may not purchase any additional ownership stake of private entities such as warrants, preferred stock, or common stock purchased through TARP.
STEP 2: The legislation would require the Treasury to sell any ownership stake of a private entity by July 1, 2010. Revenue from the sale of TARP assets must be used for debt reduction.
STEP 3: If the Treasury Secretary determines the assets are undervalued AND there is a reasonable expectation that the assets will increase to their original purchase value, the Secretary may hold the assets for up to one additional year.
STEP 4: Beyond July 1, 2011, the Treasury Secretary may not hold any direct ownership of private companies unless Congress grants additional authority.
So far as I can tell, the plan is not yet part of a formal bill that’s been presented to the Senate, but it’s important to keep talking about it until we do see that action. I don’t want to see this great idea lost in the shuffle of news about Michael Jackson, Gov. Stanford, Sarah Palin–or even, as important as they are, health care and cap and trade efforts. It’s not the sexiest thing you’ll ever hear about, but it might be the most straightforward approach to getting the government to mind its own business–that is, to stop minding our businesses.
Sign John Thune’s petition in support of the government ownership exit plan, and you’ll receive updates on the strategy, including (presumably) when it comes up for a vote. We’ll need to weigh down the phone lines of our own senators when that time comes.
For more information on the plan, watch this video of Thune on Larry Kudlow’s CNBC show last month:
Cross-posted at Catherine Favazza.
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