Highway Robbery

The details of the Treasury Plan have been released and it is scary. The plan will give the Treasury a blank check of 700 billion to spend as it deems necessary on buying mortgages. There will be no process in place to make sure the funds are distributed fairly or that taxpayer money will be protected. Maybe the dollar bill should say "In Hank we trust". From the New York Times:
"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 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."
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.

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.

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