"The Bush administration on Saturday formally proposed a vast bailout of financial institutions in the United States, requesting unfettered authority for the Treasury Department to buy up to $700 billion in distressed mortgage-related assets from the private firms.The administration has been known to use times of fear to forward its agenda. The people in Treasury will soon be in the private sector and human nature is still human nature. This is insanity.
The proposal, not quite three pages long, was stunning for its stark simplicity. It would raise the national debt ceiling to $11.3 trillion. And it would place no restrictions on the administration other than requiring semiannual reports to Congress, granting the Treasury secretary unprecedented power to buy and resell mortgage debt."
In addition, this will bring the deficit to over 1 trillion dollars. Foreigners are no longer crazy about funding our excesses. This could have a disastrous effect on interest rates aside from the other unintended consequences. However, all the short term solutions that got us in to this mess were widely cheered and I don't see why this time will be any different. We are mortgaging our future. There is no such thing as a free lunch.