“The 700 Billion dollar bail out for Wall Street is being driven by fear, not fact.”
“…the claim by the Fed and Treasury that spending $700 billion of public money is the best way to recapitalize banks has absolutely no factual basis or justification.”
“Almost every economist I know rejects the Paulson approach and argues instead for directly injecting capital into the banks. The taxpayers give them the money and then we own some, or all, of the bank. (That’s what Warren Buffet did with Goldman Sachs.)”
It seems to me those folks are right. The 700 Billion dollar bailout is being driven by fear, rather than reason, and there are better ways forward than the one proposed by Paulson and tweaked by Congress.
Other nations have faced this same problem (albeit in a smaller way). Most have handled it differently, and come out ahead. There’s no reason we should be trying a method that will leave each one of us saddled with $2300 of debt (or up to $6900 of debt when interest on the debt is factored in) — and has no guarantee of working. There are better methods out there. Yet, Congress appears willing to go along with the Paulson plan — not because they are acting rationally — but because they have allowed themselves to be panicked.
Asking our Congress to take on Wall Street — or even take on our weak Administration — and do something right for a change is too much like asking pampered house cats to chase wolves. It’s simply asking too much, given the quality of the majority of people in Congress.