According to Paulson's plan, the government using yours and my money will buy back all these bad mortgages at or near the inflated price the banks lent the monies for. In return the Fed now holds these mortgages, many in default, and according toPaulson's plan he will appoint an oversight Committe to oversee the resale of said properties. This Committee would be according to Paulson "made up industry financial experts", in other words the same folks that got us into this mess. Here is the kicker. The Fed will liquidate these mortgages at a loss, that's why they can't be sure of the plan's final price tag. The guesstimate ranges anywhere from seven hundred billion, to over a trillion dollars. Now the Fed has all these properties to sell so who do they sell them too? You guessed it, to the very same companies they just bailed out, who by the way should they have incured any losses in their earlier transaction with the Fed, get to write off the loss on their taxes due to the way corporate taxes are set up today. In the mean time, they aquire the properties they sold at half the price or less (ever been to a government auction?), and are then allowed to turn them over at a profit in resale. It's the old speculation market all over again.
George Bush ran five oil companies before he went into politics. All five of those companies he ruined financially. His rescue then were the Saudi's, Bush family friends who bought up the companies and got them running again. Last time I checked, I was not a member of the Saudi royal family, and the Bush family are definatly no friends of mine. This bail out comes according to Paulson with no strings attached. In his own words;
"If we design it so it’s punitive and so institutions aren’t going to participate, this won’t work the way we need it to work," Mr. Paulson said on "Fox News Sunday." "Let’s talk about executive salaries. There have been excesses there. I agree with the American people. Pay should be for performance, not for failure." But he quickly added: "But we need this system to work, and so we — the reforms need to come afterwards."
Just give us the money and trust us. Sorry but I for one expect Congress to forgo their planned recess and to debate this purposal openly rather then passing legislation in secret with only lobbiest getting input. I hope you will join me in this.