Thanks for Commenting
Bravo, Mario. The GOP needs more people speaking up for what is right, not what is the most mindless partisan position.
I agree that the bailout plan is highly flawed. On the other hand, I think that, done right, the bailout plan could be a win-win scenario. It just depends on how it's implemented.
The cause of all this mess has been securities which bundled large amounts of home mortgages. Somewhere between 2 and 5 percent of these mortgages are in serious danger of default - and that number is gradually increasing as the economy worsens (snowball effect). The real problem is that, even though these securities are still worth well over 90% of what they were originally valued at, the companies are unable to find buyers for them at even much lower than 90%. As a result the corporations have to report these assets being worth much less than they actually are. This has lead to the slashing of their credit ratings which in turn has made it hard for them to get the credit that all large corporations use for do the day to day operations.
Paulson has requested that he be given $700B and carte blanche on how to spend it. This is a bad idea, not because its impossible for Paulson to spend it wisely but because there's no mechanism in place to keep him from using it to his (or his boss and his boss's party's) advantage. If the Feds do buy these securities, they should buy them at a discounted rate - say somewhere between 85 and 93% of "face" value. That way, the corporations take the hit for their poor decision making but are left in a position to recover, and the Feds can actually make a profit on the securities as they continue to bring in payments on the 90+% of mortgages that don't go into default.
Done right, it's a potential godsend for the Feds, and can be used to help pay down the national debt, or at least mitigate ongoing deficits.
Done wrong, it potentially ends up with the taxpayers paying more than the securities are worth in return for political donations (to whichever party is in power) leading to a net loss.
Unfortunately our current chief executive and his administration have proven that they're not trustworthy and as a result we'll have to place regulation in the way of simply trusting Paulson to do whats right.
I also hope that the Dems in Congress don't lard the bill up with unrelated legislation. A provision for helping homeowners refinance is not unrelated in my opinion. It only makes sense to mitigate the number of these mortgages that fail.
From the looks of things it appears the Congressional GOP is going to play politics with this and refuse to vote for it, knowing that the Dems will have to pass it in order to prevent the economy from collapsing. They'll then claim to be in favor of fiscal responsibility and free markets, conveniently ignoring the fact that it was their own deregulation efforts that lead to this mess in the first place.
FTA: "...This nonsense that we have an election to win and that is the reason for remaining Chairman is just that - nonsense. You don't need a title to volunteer your time. The same people, all of those in the room yesterday, could work just as hard to win the election whether Mr. C'deBaca had the title of Chairman or not...."
Hmmm...that's exactly what I've been wanting to tell a certain community organizer wanting to be President of the United States. 
Mario,
Thanks Mario,
Not only was C'de Baca ignorant of the effect of his statement, he might have been racist; but bragging about being conquerors rubs salt in old wounds. Just because he is named after the head of a cow, doesn't mean he has to act like a horse's rectum.
As to the bailout, that's a tough one and it is hard to depend on any of our national politicians to do the right thing.
Commenting by HaloScan
