Holy cow. I wonder why Paulson is being so subtle in his request? LOL! "I need the complete and irrevocable power to give away unlimited tax payer money to my buddies on Wall St. OR WE'RE ALL DOOMED!!!!!"
Section 8 of his proposal is classic: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.
This would authorize him to use $700,000,000,000 in tax payer money to buy the most toxic of mortgage related assets from any firm with their headquarters in the US. He is supposed to buy them for a "fair" price, but this clearly means "more than what they are actually worth" since if these financial institutions wanted to sell them for what everyone else understands is a "fair" price - i.e., "market price" - they have been and continue to be free to do that at any moment without any help from the government or tax payers. BUT THEY DON'T WANT MARKET PRICE for their assets since they aren't worth anything like what they have been saying they are worth. In some cases they may not be worth anything at all. And in some cases they may actually be worth less than zero!
In order to pay for this the laws governing how much debt the US can run up have to be changed (although this is fairly standard operating procedure - every time we hit the ceiling Congress just raises the limit.) The new limit will be $11,315,000,000,000 - about $1.5 trillion more than before making GWB the proud father of over $6 trillion dollars in US debt. Heck of a job Georgie!
Keep in mind that when the S&L bailouts happened tax payers were told it would cost around $20 billion. It ended up costing $160 billion. If this deal turns out to be on a similarly misrepresented we will be looking at $5.6 trillion dollars and there really could be that much toxic mortage related products out there! But: NO ONE KNOWS! Hell, it could be more!
They are going to try to rush this through by Monday. If it passes like this it is basically the end of the US as I understand it or would like to see it. Beyond just transferring tax payer wealth into the hands of their buddies on Wall St, this plan has the added benefit (for some crazy world view) of bankrupting the US and thus accomplishing what conservative republicans in the Norquist mold want but know they could never get at the ballot box: the revocation of the New Deal and all government programs not aimed at propping up Wall St or fighting wars. It won't matter if Obama (or the Dali Lama, or whoever) is the next President - there won't be any money left to enact universal health care or anything of that sort.
Now to be fair (or is that naive?) there is some chance this could work out. Paulson could negotiate good deals; he could be tough with his former and future colleagues on Wall St for the benefit of US citizens. Also Paulson could transform into a fifty foot tall robot with laser beam eyes who can crap solid gold and save us that way. But, um, I don't think so.
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Section 8 of his proposal is classic:
This would authorize him to use $700,000,000,000 in tax payer money to buy the most toxic of mortgage related assets from any firm with their headquarters in the US. He is supposed to buy them for a "fair" price, but this clearly means "more than what they are actually worth" since if these financial institutions wanted to sell them for what everyone else understands is a "fair" price - i.e., "market price" - they have been and continue to be free to do that at any moment without any help from the government or tax payers. BUT THEY DON'T WANT MARKET PRICE for their assets since they aren't worth anything like what they have been saying they are worth. In some cases they may not be worth anything at all. And in some cases they may actually be worth less than zero!
In order to pay for this the laws governing how much debt the US can run up have to be changed (although this is fairly standard operating procedure - every time we hit the ceiling Congress just raises the limit.) The new limit will be $11,315,000,000,000 - about $1.5 trillion more than before making GWB the proud father of over $6 trillion dollars in US debt. Heck of a job Georgie!
Keep in mind that when the S&L bailouts happened tax payers were told it would cost around $20 billion. It ended up costing $160 billion. If this deal turns out to be on a similarly misrepresented we will be looking at $5.6 trillion dollars and there really could be that much toxic mortage related products out there! But: NO ONE KNOWS! Hell, it could be more!
They are going to try to rush this through by Monday. If it passes like this it is basically the end of the US as I understand it or would like to see it. Beyond just transferring tax payer wealth into the hands of their buddies on Wall St, this plan has the added benefit (for some crazy world view) of bankrupting the US and thus accomplishing what conservative republicans in the Norquist mold want but know they could never get at the ballot box: the revocation of the New Deal and all government programs not aimed at propping up Wall St or fighting wars. It won't matter if Obama (or the Dali Lama, or whoever) is the next President - there won't be any money left to enact universal health care or anything of that sort.
Now to be fair (or is that naive?) there is some chance this could work out. Paulson could negotiate good deals; he could be tough with his former and future colleagues on Wall St for the benefit of US citizens. Also Paulson could transform into a fifty foot tall robot with laser beam eyes who can crap solid gold and save us that way. But, um, I don't think so.
- jim 9-20-2008 9:58 pm