As we’ve worked through this period of market turmoil, we have acted on a case-by-case basis ”” addressing problems at Fannie Mae and Freddie Mac, working with market participants to prepare for the failure of Lehman Brothers, and lending to A.I.G. so it can sell some of its assets in an orderly manner. We have also taken a number of powerful tactical steps to increase confidence in the system, including a temporary guaranty program for the U.S. money market mutual fund industry. These steps have been necessary but not sufficient.
More is needed. We saw market turmoil reach a new level last week, and spill over into the rest of the economy. We must now take further, decisive action to fundamentally and comprehensively address the root cause of this turmoil.
And that root cause is the housing correction which has resulted in illiquid mortgage-related assets that are choking off the flow of credit which is so vitally important to our economy. We must address this underlying problem, and restore confidence in our financial markets and financial institutions so they can perform their mission of supporting future prosperity and growth.
We have proposed a program to remove troubled assets from the system. This troubled asset relief program has to be properly designed for immediate implementation and be sufficiently large to have maximum impact and restore market confidence. It must also protect the taxpayer to the maximum extent possible, and include provisions that ensure transparency and oversight while also ensuring the program can be implemented quickly and run effectively.
The market turmoil we are experiencing today poses great risk to U.S. taxpayers. When the financial system doesn’t work as it should, Americans’ personal savings, and the ability of consumers and businesses to finance spending, investment and job creation are threatened.
The ultimate taxpayer protection will be the market stability provided as we remove the troubled assets from our financial system. I am convinced that this bold approach will cost American families far less than the alternative a continuing series of financial institution failures and frozen credit markets unable to fund everyday needs and economic expansion.
This basically makes whole the bond holders of all the institutions that made bad financial decisions (and profited from them) while soaking the taxpayer.
It will lead to Weimar style hyperinflation that will devastate people on fixed incomes.
It will not solve the underlying problem which is Too much credit, not too little credit.
I am going to email all my congressmen and representatives to stop this madness before we implode. I suggest others consider doing likewise.
Your congressman’s fax/phone and email can be found here:
http://www.conservativeusa.org/mega-cong.htm
I recommend folks read the following:
http://globaleconomicanalysis.blogspot.com/2008/09/open-letter-to-congress-on-700-billion.html
The most alarming of the 700 billion (Ha Ha we should get off so lightly) bailout proposal is the Section 8, which deals about review. What follows is the entirety of the section of the bill that regulates review:
” Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
Why are we giving the former CEO of Goldman Sachs, (who helped engineer this disaster) god like powers over our purse? Nobody else in the Government, not the President, not COngress, Not the Supreme Court has such a clause.
Why does Paulson whose hundreds of millions earned at Goldman is safely stashed in Treasuries (he obviously did not buy the KoolAid his firm was peddling) get such authority?
Please write your representatives, folks.