Abboud Criticizes Manzullo Financial Reform Ideas

With the election 8 days away, at least one candidate Democratic Party aspirant for the 16th congressional district seat that Republican Don Manzullo now holds seems to be ready to send out one press release a day.

Here is Monday’s:

Abboud: We Can No Longer Afford this Type of Inexperienced, Ideologically Drive Representation

ROCKFORD – Democratic challenger and small business owner Bob Abboud called his opponents recent proposed financial legislation ‘the kind of knee jerk, ideological allegiance that created our current crisis.’ Abboud hammered his opponent after learning about the broad strokes of HR 7223, of which Don Manzullo is a co-sponsor.

“At a time when Americans are looking for common sense solutions to our most serious problems, all Don Manzullo can offer is the same, failed, ideological irresponsible policies that sent our economy in the tank and our financial system into chaos,” Abboud said. “We can no longer afford to suffer through my opponent’s inability to accurately asses and address real challenges. We’ve waited for 16 years and that is long enough.”

The bill would suspend the capital gains tax, a schedule for the sponsored government enterprises for privatization and suspend mark-to-market accounting requirements. Abboud said these three proposals are a sure recipe for disaster if the government intends on solving our financial crisis and ensuring that taxpayers get a return on the investment they made in the form of the $750 billion rescue.

“Eliminating the capital gains tax will only encourage major investors to get out of a volatile stock market,” Abboud said. “The whole idea of the cap gains tax, an idea created by Richard Nixon, was to encourage long term investment in the stock market. Removing this tax won’t help working families; it will only give an easy out clause to big dollar investors and create even more instability in the marketplace.”

Abboud continued to explain that removing the mark-to-market accounting requirements was the real tragedy of this legislation. These requirements ensure that assets, like homes, are assessed for their real value. In other words, what the asset is actually worth at the time of the assessment. Removing these requirements would allow financial institutions to artificially inflate the value of these assets, giving the bank the leeway to lend out more money than it is really holding. This is the very same problem that caused this financial collapse.

“This is the same kind of ridiculous accounting principles that sent Ken Lay to jail, bankrupt Enron and cost too many regular people their pensions and life savings,” Abboud said. “Essentially what Manzullo is proposing is that we make up the value of these assets in hope that the market catches up, allowing banks to loan out more money than they actually have. As usual, Manzullo’s do nothing policies only seek to push serious problems onto others because he lacks the ability to address this challenge head on.”

The final problem with the legislation as Abboud sees it is the creation of a timetable for the re-privatization of government acquired assets. Abboud says that creating an end date to release these assets back to the free market will only encourage the market to drive down the price and then purchase them at significantly reduced value.

“This will guarantee American taxpayers will not get their money back,” Abboud said. “It’s like telling the opposing team where and when you’re gonna pass the football and then being surprised when they intercept it. This is one more mistake in the long list of mistakes that brought this crisis upon us. The question is, do we want to continue going down the same road, or is it time to change course.”

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