Shelved in fiction: 'Henry Paulson and the Toxic Assets' »
Posted By Radiofreeeuropa 1 year ago in Business & FinancePaulson says the government won't go ahead as planned with the key bailout provisions that Congress approved: the purchase of Wall Street firms' junk assets.
So, the plan for spending the $700 billion is scrapped. But Paulson's going to put that money somewhere. And he's the appointee of one of America's most all-time unpopular presidents (recent polls say that).
We just had a monumental election, but right in the middle of this miserable reign delay, Paulson's rolling back the TARP. Who's on first?
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Radiofreeeuropa
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Raksu1 year ago
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I can't believe this. They worked so hard to sell this to the American people because "if we don't do this all of America will suffer!" Then the scrap it. Why? Someone just wanted to line their pockets. All this has been is a huge money and land grab.
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truthiness1 year ago
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the american portion of the crisis is due to 4 things (primarily)
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1) freddie and fannie being allowed to give housing loans far too large to people who should have known they couldn't pay them. thereby setting up a credit crisis.
2) allowing wall street to speculate on commodities futures (oil, gold,etc) which artificial inflated the prices. thereby setting up an inflation crisis.
3) the govt incurring a massive debt to china to finance a war while cutting taxes which weakened the dollar. thereby hurting purchasing power.
4)the federal reserve attempting to resolve the problem by lowering interest rates, which means printing more money, which also weakened the dollar, hurting purchasing power.
so, then we found ourselves in a situation where people could get less for there money, owed more, and things cost more. so people start spending less. which causes companies to lose money, which they always react to by cutting jobs, which means there are fewer people able to spend. the next thing the companies do is cut prices in an attempt to spur purchasing (deflation) which still results in less money coming in against the higher cost they spent to make the goods a year ago. more income lost to the companies, more job loss.
if nothing is done the spiral will continue till the bottom is hit.
two choices are available to try and stop the bleeding long enough to for some type of innovation to provide an economic boom. either put money into the companies so that they can keep people employed (the bailout plan) or or put money into the hands of the masses so that they can spend it and reinvigorate the economy (the Obama tax plan).
both plans have positives and negatives. the chief negative of both plans is that you are counting on the recipients to do what is necessary with the money.-
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truthiness1 year ago
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now if Paulson decides to unilaterally change the plan (which i'm fairly certain is illegal without congressional approval) that throws a whole new twist into the picture.
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by bailing out the credit card companies, he will essentially be extending the credit of american citizens. the only result I can see from this is to encourage people to spend with their credit cards. while this may provide short term relief to corporations due to the added income, it will only exasperate the problem by extending the credit crisis. now citizens will be in greater debt, credit card companies will have greater debt to the banks and the govt bailout money they owe, which will cause the crash cycle to begin again with even more pressure upon it.
why is paulson recreating the problem which got us here?
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Radiofreeeuropa1 year ago
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Democrats and republicans alike passed this bitter pill, on the insistence from the white house and Paulson that the sky would fall if they didn't. The public balked but the "experts" said it was necessary.
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A few republicans in the house balked, but were brought on board by loading up some pork in the bill.
Essentially no one wanted to take action or inaction that could be seen in the future as an albatross around their neck. -
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Radiofreeeuropa1 year ago
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KISA452a1 year ago
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Actually, i recall pretty well. Bush and Paulson came up witha 3 page summary. Pelosi and co created a 100 page fiasco that Dems voted for (2/3 for) and Repubs against (1/3 for it). Pelosi threw a hissy fit that Bush didnt' get the Repubs to come along. Then the dealing began and enough Repubs folded to the bribes offered to get it passed. Enough blame to go around, but the majority falls on Pelosi. Did you watch her and listen? I have VERY liberal friends who agree she was simply off her rocker.
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truthiness1 year ago
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while pelosi isn't much use to anyone. the plan bush offered gave paulson control of the money without any oversight or any need to report to anyone. it wasn't between the lines, it specifically said it.
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the dems wanted a plan that required transparency and oversight.
of course what we got was a pile of dung because we have adolescents in charge of nation, but there is no politician in washington who can escape that blame.. including Obama who was campaigning on the next plan while this debate occurred.
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