Errr, Americans seem to need somebody to blame for this crisis. But before we lynch Bernake and Paulson, we should all take a good look in the mirror.
the bailout “shall be limited to $700,000,000,000 outstanding at any one time.” - the key words are 'at any one time' meaning this is a blank check for Paulson that he can just keep on drawing
It gets even better: "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"
so Paulson gets a blank check and we can't see what he's doing with our money - awesome! sign me up
to top it off with icing: "The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation... designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;"
so totalitarian socialism replaces free market enterprise? o yeah what happens to the dollar?
Paulson may know more than Congress about finance but it doesn't take a genius to see that the proposed bailout is just a scam.
The Swedes got into similar trouble in the 90s and they solved it the right way (a bailout with a fair return for the government): "Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government.
That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well."
http://www.nytimes.com/2008/09/23/business/worldbusiness/23k...
so you'd still rather put your trust into something without reading the fine details? Paulson isn't your uncle you know - not to mention both Democratic and (even) Republican senators are just pissed: http://www.politico.com/news/stories/0908/13789.html
As for the bailout being a "scam", would seem to suggest that someone is flying off to Mexico with a bucket of cash. The reality seems to be that everyone is in for some pain. Companies have gone under, people have lost their jobs, and if the government doesnt act, its going to get worst.
without any oversight whatsoever, a certain someone can technically go off to Mexico with 700 billion multiple times without anyone else knowing why or when
free markets self correct; if you're going to interfere with it since everyone has pain why not just bail out everyone then and not just Wall St? - hell even the auto makers need bailing out now
So, yeah, I'm looking for who to blame.
The majority rules in this democracy we live in and we can't have all policies the way we would like. However, we at least shouldn't distort the free market to this degree and spread the cost for this failure to properly judge risk.
If the government decides to inflate to pay off the bailout, then it sucks for savers and is awesome for mortgagees. But if their intervention isn't enough to halt the deflationary pressure of all these financial institutions failing, then it'll be catastrophic for debtors and good for savers.
People who held cash in the depression (and didn't see it wiped out by a bank run) gained close to 4x their money in about 2 years, which is as good or better than most other bubbles in history. That's relative to consumer prices: relative to asset prices (like stocks), it was nearly a 10x return.