Saturday, September 20, 2008

Treasury Bailout of Wall St. Draft Legislation

The Bush Administration has just released its proposal for Treasury authority to buy up mortgage-related assets.  It's really short, just a few pages in length.  And seems to be fairly broad.  All the Treasury has to do is report to Congress every so often and it gets authority to purchase up to $700,000,000,000 worth of bad Wall St. investments.  [Funny how just a little bit ago folks were suggesting that we should entrust these same Wall St. people to manage actively manage individual social security accounts.  Or even funnier how we can bail out Wall St. but can't bail out Medicare, or educate our children properly, or fix roads, etc...]  This will raise the national debt to $11.3 trillion.  The plan could pass as early as next week.  

For greater comparison, the NY Times stated that "A $700 billion expenditure on distressed mortgage-related assets would be roughly what the country has spent in direct costs on the Iraq war and more than the Pentagon’s total yearly budget appropriation. It represents more than $2,000 for every man, woman and child in the United States."  Sorta scary in the scope of this plan.

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