Here it is in all its glory, The 700 Billion Dollar Bailout Plan (accompanying fanfare inserted here):
Legislative Proposal for Treasury Authority To Purchase Mortgage-Related Assets, Wahington Post
After reading this, the first thing that popped into my mind was, "We are screwed..."
If you read closely, you will see that the Senate and House, not to mention "Double U" Bush have effectively placed, 700 Billion Dollars (say it a few times, let the number roll in your mouth and sink in) into the hands of Secretary of the Treasury Paulson's hands and added that amount onto the already immense public debt, raising it to $11,315,000,000,000(with an estimated 1.5 trillion directly to China). I don't have to be an economic expert or a mathematician, but according to these absurd numbers, this bailout alone raised the taxes that each taxpayer owed to the world by two thousand three hundred dollars, bringing our individual debt to other countries to 37,716 dollars, or roughly 20 years of taxes used on nothing but paying our debt off and the bare necessities of the United States State and Federal Governments. I know that the now OKed proposal says that Paulson can only spend a maximum of 700 Billion Dollars(No, I can't stress that enough) over the course of 2 years, but hear me out, it also states "at any one time." which translates neatly to banks as "as long as we can sell off these mortgages, we can always loan you more money.". And really, I haven't even gotten to the worst part of the plan, which is that Paulson gets to use this money all with no possible reprecussions or strings attached, as mentioned in Section 8, which means we will never be able to critique this bastard on the poor investments he will undoubtedly make.
It is a sad state of affairs, a sad sad state of affairs...
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6 comments:
Yeah but in the end, times are pretty bad for economics. I mean, as you yourself have said, the debt is enormous and a fast response is needed to fix it. I mean, the bill didn't even pass the first time so a lot of compromise was needed and trying to make everyone happy at this point is pretty hard. Therefore, yeah it definitely could be better but i think that it is pretty good all things considered.
Another bad part of the plan i think is the raising of the FDIC. On October 3, 2008, FDIC deposit insurance temporarily increased from $100,000 to $250,000 per depositor through December 31, 2009. I like the FDIC, but i can't help thinking its gunna screw us over if the economic situation keeps going down hill. If bank closures continue at recent rates or accelerate, the FDIC may not be able to fully recover the deposits of its members.The Federal Reserve and Treasury intervention might be required to meet the FDIC guarantee to depositors...costing tax payers billions or even trillions of dollars over the long term. Although, i could be feeling this way because i have been pretending to be a libertarian too much in class.
Jesse, don't forget that this increases the debt, not decreases
This bill can't help the economy and will only hurt it. Government regulation got the economy into this debacle in the first place.
In response to ballin4life i would have to really disagree with the comment that "Government regulation got the economy into this debacle in the first place". This problem has been developing in an administration in which less regulation has been seen as a solution to economic problems. Couldn't government regulation helped prevent this problem if the government regulated conditions of loans and adjustable interest rates more effectively in order to protect those in risk of defaulting on their mortgages. More on the topic of georges post, the fact that we owe such large sums to investors from other countries seems especially worrisome and would seem to make us rather vulnerable to foreign interests wouldn't it?
While I am a reluctant supporter of the bailout, I would like to point out that even though some government debt is good, I do believe this might be a bit much. One good side is that we will hopefully get stakes in these banks, thus potentially recovering some of the $700 billion. Another point: not all of the money will necessarily be used (hopefully).
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