Bailout nears completion

A Wall Street bailout package that could potentially see $700 billion in taxpayer dollars go to the beleaguered banking and finance industry is creeping towards completion.

But it appears that U.S. lawmakers have recognized the flaws in the original proposal and have added significant oversight, taxpayer protection, and some assistance for people other than the well-compensated Wall Street titans that got the nation into this mess.

Legislators in Congress could pass the bailout bill as early as tomorrow, after the weekend saw it grow significantly larger than the bill originally proposed by the George W. Bush administration.

That rendition requested unlimited and unchecked power to purchase the toxic, sub-prime mortgage-related assets that are hampering U.S. banking institutions.

Added to the legislation, according to reports, are stipulations that limit excessive compensation packages for finance executives and require that the government receives shares in any company selling assets to the U.S. Treasury.

That way, when the expected economic upswing occurs the government and the taxpayers will be able to recoup some or all of their investment.

An oversight structure, which was sorely lacking from the initial proposal, has been added into the bill currently being drafted in Washington, D.C., along with protections and assistance for homeowners facing foreclosure.

Also, if government-owned stakes do not create the kind of revenue expected, a “Wall Street” tax could come into play in five years, providing a safety valve to recoup money spent on the bailout plan.

At the very least Congress appears to have watered down the Bush administration’s original proposal, reducing the inital appropriation to $350 billion, with an additional $350 billion available following intense oversight and review of the initial process.

It is now in a smaller, more regulated form that provides additional bailout oversight with a chance that taxpayers and the government may actually see a return on their investment.

The next step is increased banking regulations. The bankers and the nation’s great financial minds, who greedily invested in these bad assets and risky subprime mortgages, have shown that greed triumphs over good judgment.

Until that situation reverses itself, the U.S. government’s job is to make sure that judgment is bolstered by law.

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1 Comment

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One response to “Bailout nears completion

  1. westwrdguy57

    During the hearings, when Senator Chuckie Schumer was trying justify why spending that whole $700 billion immediately was necessary, it appeared Mr Bernanke had a smug look. He was paying Schumer little attention. The Fed chairman was unyielding…the entire amount had to be laid out now. I thought, are we in that much trouble the banks need that much of an infusion of cash right away? Increments would be a better choice. It’s a lot of money, even for Wall Street.

    They just loaned AIG $85 billion. By the way, I’ve heard this is a great time to invest in AIG by loaning some money. You are almost ‘guaranteed’ a real high rate of return. Since our government has a large stake in the bailout of this gigantic insurance company, then it is a safe gamble.

    A few years back I was pro Bush. It seems, and I hate to keep count, every few months he’s asking Congressional approval of billions more for Iraq. Bush was talking about printing more paper money recently to prop the dollar. What good will that do, only more to squander.

    We are now almost $10 trillion dollars in debt! We’ll reach that next year.

    Bring back the good old days (I once thought were the immediate post WWII years) now only need to go back to the Clinton years. We then had a budget surplus of something over $200 billion. He brought us out of record high deficits during the early 90’s and by the end of his 2nd term we were on solid ground economically.

    The United States has never been in such serious a condition since the 1930’s. I do blame war spending for much of it. And a unnecesarry war at that, but with all due repsect to our military force who are martyrs for the Bush administration’s baseless cause. We cannot have all our eggs in one basket, espeically now.

    There is a lot of blame to go around for the housing and mortgage crisis. The homebuyers put little thought into what would happen when the higher interest rates kicked in. Should not they have known they couldn’t afford the mortgages once the interest rose? The banks were impulsive in loaning to high credit risks.

    The average citizen doesn’t really know the severity of this whole political and finacial problem. We are a young country. A country 230 years of age is very new. Great Britain and most all of Europe and the rest of the world, except much of South America and parts of Africa are over a thousand or thousands of years old.

    No one ever thought we’d become a debtor nation. Better all pray we don’t get taken over by some government in our now weakened economic and militarally stretched thin state.

    God help us a terrorist strike on any of our key infrastructure at a time like this.

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