Rescue plan seeks $700B to buy bad mortgages

[tommie gorman]

I am really hating this idea of bail outs. I mean if I fail my loan or whatever its up to me to sink of swim. I believe thats exactly what they should have to do, not increase the taxpayers debt and just allow the same idiots to do it all over again with no recourse. Screw them. Sink or swim dammit like the rest of us, and be accountable like the rest of us also.

WASHINGTON - The Bush administration is asking Congress to let the government buy $700 billion in toxic mortgages in the largest financial bailout since the Great Depression, according to a draft of the plan obtained Saturday by The Associated Press.

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The plan would give the government broad power to buy the bad debt of any U.S. financial institution for the next two years. It would raise the statutory limit on the national debt from $10.6 trillion to $11.3 trillion to make room for the massive rescue. The proposal does not specify what the government would get in return from financial companies for the federal assistance.

"We're going to work with Congress to get a bill done quickly," President Bush said at the White House. Without discussing details of the plan, he said, "This is a big package because it was a big problem."

The White House and congressional leaders hoped the developing legislation could pass as early as next week.

Administration officials and members of Congress were to negotiate throughout the weekend. The plan is designed to let faltering financial institutions unload their distressed mortgage-related assets on the government, and in turn the taxpayer, in a bid to avoid dire economic consequences.

Bush said he worried the financial troubles "could ripple throughout" the economy and affect average citizens. "The risk of doing nothing far outweighs the risk of the package, and over time we're going to get a lot of the money back."

He added, "People are beginning to doubt our system, people were losing confidence and I understand it's important to have confidence in our financial system."

"In my judgment, based upon the advice of a lot of people who know how markets work, this problem wasn't going to be contained to just the financial community," the president said. He said he was concerned about "Main Street" and that what happens on "Wall Street" affects "Main Street."

Sen. Chuck Schumer, D-N.Y., called the proposal "a good foundation," but raised concerns it "includes no visible protection for taxpayers or homeowners."

Democrats are insisting the rescue include mortgage help to let struggling homeowners avoid foreclosures. They also are also considering attaching additional middle-class assistance to the legislation despite a request from Bush to avoid adding controversial items that could delay action. An expansion of jobless benefits was one possibility.

Asked about the chances of adding such items, Bush sidestepped the question, saying only that now was not the time for political posturing. "The cleaner the better," he said about legislation he hopes Congress sends back to him at the White House.

If passed by Congress, the plan would give the Treasury secretary broad power to buy and sell the mortgage-related investments without any additional involvement by lawmakers. The proposal, however, would require that the congressional committees with oversight on budget, tax and financial services issues be briefed within three months of the government's first use of the rescue power, and every six months after that.

While the proposal contains no requirement that the government receive anything from banks in return for unloading their bad assets, it would allow the Treasury Department to designate financial institutions as "agents of the government," and mandate that they perform any "reasonable duties" that might entail.

In a briefing to lawmakers Friday, Paulson and Federal Reserve Chairman Ben Bernanke painted a grave picture of an economy on the edge of a major recession and telling them that action was urgent and imperative.

In a session with House Democrats, they described a plan where the government would in essence set up reverse auctions, putting up money for a class of distressed assets

[Buntz]

I agree with you 100% Tommie. Sink or swim should be their only options, not a bail out. Most knew what they were getting into when they sign the contracts.

[ghostmaster]

All this is, is corporate socialism. 

[MttFrog13]

I am really hating this idea of bail outs.

everyone does, but during recent times, there wasn't an option. I think everyone would agree that the bail outs shouldn't have happened in the first place. While we know that there wasn't an option of the bail outs unless we really wanted to put our economy into a true economic crisis, i think that if the government can go and bail companies out, the government should be able to regulate those companies so that they don't have to get bailed out again.

[ghostmaster]

everyone does, but during recent times, there wasn't an option. I think everyone would agree that the bail outs shouldn't have happened in the first place. While we know that there wasn't an option of the bail outs unless we really wanted to put our economy into a true economic crisis, i think that if the government can go and bail companies out, the government should be able to regulate those companies so that they don't have to get bailed out again.

They were regulated before the Bush Administration got a hold of it.  (at least in the case of mortgage financing).

People, in general, are pretty damn stupid, at least in this country.  But the dumbass companies who gave loans to these people, are just as guilty, as he people who took out mortgages they couldn't afford.

[MttFrog13]

they were probably regulated in a way that would be OK if we had a healthy economy, but things were goin down in the first place. A lot of people don't realize that the stock market, housing, and credit crisis are only symptoms of a bad economy not the cause. A lot of these companies actually make most of their money off people who make late payments but when people who are late can't eventually pay something, both sides lose. I'm not too familiar with the way housing works but yeah it was probably both sides fault, but i do think that in a healthier economy in general maybe the bailouts wouldn't have been needed or maybe they only just gradually caused this themselves.

[mudmanc4]

People, in general, are pretty damn stupid, at least in this country. 

Thank you  !!!!!!!!!    And I'll second that.     I was in the bank last wed. , ther was a pretty good line waiting, I listened to the chick arguing with the clerk about how to cash her check, it was hilarious, she thought she was special, she had a business check, and wanted cash, you can't do that . Even if you have the liquid in there, the check still needs to be deposited if it is written to a business.   She said she did it all the time there, well, i have gone to that bank for over 15 years, so I knew several of the long term employees, they were looking at me like they needed help   :haha:  She wouldn't take no for an answer until the manager stepped out and stook her into her ofice and explained to her ( loudly ) after being yelled at , that there was no way it was going to happen, there is a three day hold on most business checks.   The funny part was at the end when the woman demanded that she go to the ATM and withdraw money then. Finally the manager said fine, go try.   I was still in line when the woman came rushing back in screaming  " don't deposit your money, the bank stole mine "   :2funny:  

A lot of people don't realize that the stock market, housing, and credit crisis are only symptoms of a bad economy not the cause.

  whaa??????

[ghostmaster]

He's right.  The "fundamentals" of our economy are not "sound", as some will have you believe.  We need a spark.  We need something to produce.  The technology and .com evolution gave us a strong economy in the 90s.  The next decade will need something like that to get us back on track.  I hear these alternative energy things might be worth giving a shot....

[mudmanc4]

He's right.  The "fundamentals" of our economy are not "sound", as some will have you believe.  We need a spark.  We need something to produce.  The technology and .com evolution gave us a strong economy in the 90s.  The next decade will need something like that to get us back on track.  I hear these alternative energy things might be worth giving a shot....

Our economies fine, it's peoples attitudes that are bad.  Look at it this way, teachers strike because they  " need " more money, the unions strike because they  " need  " more money, city workers do the same. All the while people are being taxed to death, the cities are eroding from the inside out because there taxed to death, and generally, in large cities, there are more people on welfare then not, thus , the commute.

This is why companies move there businesses elsewhere, it's half the price, and people are glad to do it.

Greed, lust , and hatred are taking over, the fact people arent spending there money is because they are taxed so high that there isn't much to go around after putting the normal amount n there savings.

[ghostmaster]

You have got to be shitting me.  You are saying our economy is bad because people are taxed to much? 

I highly doubt there are more people on welfare ANYWHERE in the US than not. 

[tommie gorman]

I highly doubt there are more people on welfare ANYWHERE in the US than not. 

Could you clarify that last sentence? It may be me.  don't know.

[mudmanc4]

You have got to be shitting me.  You are saying our economy is bad because people are taxed to much? 

I highly doubt there are more people on welfare ANYWHERE in the US than not. 

I'm saying ALL of what i said, not just that little bitty part. 

Really ? I'll find out just how many people are getting assistance , somehow.............to be continued.........

Still looking, but I'm sure there re over 70 million people on some sort of welfare.

[ghostmaster]

Ok so bad attitudes and high taxes are to blame for the bad economy? 

Good luck.  A lot of programs are state funded.  I started looking it up earlier...

Just think about it though, if there are more people on welfare than not, our goverment would be immediately in deficit, and in a lot more trouble than now.

How is a service economy supposed to survive when we outsource services?

[mudmanc4]

Ok so bad attitudes and high taxes are to blame for the bad economy? 

Yep. But , the economy is fine. Look at the trucks on the road, that people , is the best teller of all on how much people are buying. There wouldn't be all those truck's if people weren't buying crap to fill them.

Good luck.  A lot of programs are state funded.  I started looking it up earlier...

I see that, so far I have seen over 40 million just on the VA, and over 5 million just getting monthly cash. And  15 + million getting other relief of some sort. ie: gas , and electric bills taken care of .

Just think about it though, if there are more people on welfare than not, our goverment would be immediately in deficit, and in a lot more trouble than now.

How is a service economy supposed to survive when we outsource services?

We are in deep trouble, people feel free, and good , just sitting there waiting for there check, and there food stamp card to have more dollars on it. People that don't need t is what I'm talkng about, no one should  assumes I'm saying anything otherwise.

I gotcha on the outsourcing, but hey, what do you do when people strike and get more money out of you, and your way of living, changes, and or your gross goes down by 15+% , you find ways to change it.

Look, minimum wage, say you have 4 employees, payin them minimum wage, your a small company ( like there are millions of them employing millions of people ) then you have to pay more per hour, it costs you more, so you do what you have to do.You get rid of one employee to make the difference, so the person goes on welfare because they  " refuse " to work for less. ( happens every day ) Just as if there was a product made in the US that was union made, ( they keep jobs , right ?) and they get higher wages, so to hell with that, fine, you send the request to get parts cheaper from anywhere you can. Where there made the same , just a buck cheaper per part, or whatever. It's called capitalism.

[ninjageek]

I really think it all boils down to the price of gas. Gas goes up, everything goes up, people have to make tough choices. Go without allot of things.

[tommie gorman]

Where is the best place to hide a welfare check?

Under the work boots. 

[ghostmaster]

40 million can't be right.  (assuming VA means virginia)  Are there 40 million people in VA? 

[mudmanc4]

40 million can't be right.  (assuming VA means virginia)  Are there 40 million people in VA? 

No, I should have said the veterans.