Rescuing Wall Street to Save the US Economy - Neither Fair Nor Effective

http://www.americanprogress.org/issues/2008/09/fair_nor_effective.html

Ed Paisley of the Center for American Progress shares his thoughts on the unprecedented economic bailout being planned by the federal government.

Unless U.S. Treasury Secretary Henry Paulsons first stab at a $700 billion rescue of the global financial system is revised to incorporate restructuring troubled mortgages, it will be neither fair nor effective. Paulsons draft legislation attempts to rescue the balance sheets of Wall Street but does almost nothing for homeowners on Main Street. Thats a fundamental flaw. The U.S. housing market won't recover without restructuring of underlying mortgages that are troubled. Global credit markets will not respond to this exceedingly expensive plan unless we get our fundamentals right. Moreover, taxpayers will be saddled with increasingly worthless paper as many of the underlying mortgages fail.

The Paulson plan demonstrates a disturbing disconnect between the mortgage-related assets that taxpayers $700 billion is being used to purchase and the necessary restructuring of the troubled mortgages themselves. Many hard-working Americans are having trouble paying on their mortgages, which in turn is driving down the value of their neighbors homes across the country. Tens of millions of families have seen their home values plunge through no fault of their own. Nearly 1 in 10 American households—roughly 5 million—have a mortgage that is either in default or facing foreclosure. These are the families still struggling to pay their mortgage even after the earliest subprime borrowers have already lost their homes.

Without provisions expressly aimed at helping these borrowers restructure their mortgages with the assistance of the federal government or through judicial modification, this grand plan to buy "toxic" assets from the financial institutions that engineered this market meltdown will not help the U.S. housing market recover. The Bush administration, however, is ...

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• lehman
• merrill
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• progress
• progressive
• street
• subprime
• wall
• paulson
• bernanke
• congress
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• fannie
• freddie
• bailout

[seeprogress]

Yep thats about it -- click on the link to the right of the video to read CAP's analysis of the bailout plan proposed by the Bush Administration.

[ldksparda]

Remember people, spread this around if you must. But if that Stimulus doesn't pass. remember, when you're rioting and killing for a quick buck to save your families in these times, think back. "the republicans were against it, causing the Great Depression of 2009"

[ldksparda]

ROFL.

[Martintfre]

mrkm..IF we actually had laissez-faire markets then banks who loaned out money too much money to too many people that could not pay back would fail.

Then housing prices would drop as Larry the liquidator forecloses on the banks and unloads their 'toxic' assets.

Then the poor and lower middle class could finally afford to buy homes because housing prices were no longer inflated by bad government policies that rewarded bankers and punished all home owners .

[Martintfre]

UNrestrained deregulation - STOP REGURGITATING that garbage!

There is no risk as long as government regulations where any idiot loan will be backed up by the tax payers no matter how poorly supported by the ability of the person recieving the loan to repay it or the fraud committed by the lending institution who made it, That is nonsense would never happen in a free unregulated market.

Bailouts that reward the incompetent would never happen in an unregulated free market.

[saveurhomenow]

Don't Get Foreclosed On Modify Your Loan go to homesaver(DOT)tk

[AcaiBerryMONAVIE]

SUCK SATAN'S COCK wall street

[mrkmoua]

Its funny how people want laissez-faire, yet when something like this happens, they want other people to pick up the tab.

[rufousme]

Funny how the government become communists when it comes to protecting the rich bankers.

[dangusdoug]

Ok sounds good

[joneselius]

One human species, not race.