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Rescuing the Big Bailout

September 30, 2008 RSS Feed Print

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President Bush just made another appeal for Congress to pass the Paulson rescue package. This time, he emphasized that the eventual cost to the government will more than likely be far less than $700 billion or whatever Treasury ends up spending. Yet Bush did not go as far as former hedge fund manager Andy Kessler, who speculates that Treasury could make $1 trillion to 2 trillion off the portfolio of securities it buys. Here are a few options of what might happen next:

1) The Democrats could push through the bailout with more Democratic votes by adding in a stimulus package or a provision that would allow bankruptcy judges to unilaterally change mortgage contracts. With the markets in chaos, Bush would have almost no choice but to sign it. (Conspiracy theorists speculate this was Nancy Pelosi's plan all along.)

2) Continuing market chaos could push dissenting Republicans to vote for the plan as long as there is some modification that would serve to justify their change of hearts, such a change in the oversight provision that would make it harder for Treasury to spend the dough. Some sort of tax sweetener, either for buyers of the bad assets or for homeowners, would be better.

Tags:: government intervention,; Bush administration,; Congress

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As a young american, father, and hopeful prospective homeowner, the collapse of the faulty loan pyramid scheme that tripled the cost of real estate over the past 15 years is exactly what we were waiting for.
The US Government has been knowingly inactive during the entire hyperflative upsurge in real estate that has left my generation, quite simply put, INCAPABLE of ever owning a house due to stagnating wages and skyrocketing real estate values.
This returning of real estate to it's true value (affordable by the median family income of the area in which it is located) is not being hampered by government plans to "stabilize" the hyperinflated real estate market, by assuming and then sitting on all of the real estate assets refusing to let them drop back to affordable levels.
This entire fiasco is a result of lending companies doling out loans to people that only needed to qualify for "minimum" payments on negative ammortization loans, and "interest only" payments on deferred principal loans, so that these people could inflate real estate values and resell the property for profit. Quite simply put, they were running a Ponzi Scheme on the real estate market that caused the real estate sale price to go up up up.
If this act is enacted, my generation will grow up homeless in our father's land, and take a direction inflationary paycut of nearly 20%. This is absolutely insane. Not one person has said anything in regards to how this affects us. Instead, we everyone crying about thier house losing value, when it shouldve never gained value in the first place. We have lending companies begging for a bailout from the US Government, while the executive running the lending pyramid schemes get to walk away with 50 million dollar a year salaries, exempt from having thier assets seized, and exempt from incarceration.
The entire talk of a bailout plan is ludicrous. The members of congress that allowed this to happen, the executives of the lending companies that intentionally executed this scenario, and the people that profitted off "flip that house" scams over the past 15 years should be in jail, with all of thier assets seized and returned to us.
Lastly, the most ridiculous part about all of this, is the fact that Congress fat cats get to vote on this issue, when they have a vested interest in seeing that these companies don't collapse, while I end up getting nothing but the shaft, and am not even allowed to vote against it.
Wow! Just WOW!

Jason Stevenson of CA 7:49PM October 01, 2008

Congress should first fund the bailout with the congressional pensional fund. They created this mess and they should put their money on the line before any public money.
From reading the limited actual facts about this mess, it is obvious it is the spawn of congress, who set up loose regulatory controls then further loosened them to support their liberal agenda. Barney Frank personally blocked the Bush administration who asked congress to tighten up on Fannie Mae and Freddie Mac in 2003.

BL Kitzel of KY 9:40PM September 30, 2008

SO WHAT - loan money not available?
Reduce debt, limit credit card spending, live within our means.
Not a bad idea.
Maybe we have to be forced to do it.
Maybe this is the time.

Debt Free of TX 2:48PM September 30, 2008

Rescuing the Big Bailout

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