Posted on 09/20/2008 10:17:51 AM PDT by Fox_Mulder77
The only good I see is that apparently the market was on the verge of a revolving-credit train wreck, and that was averted - a good thing. Unfortunately, Congress thinks the price of doing so is to buy the train company outright.
The best solution can’t possibly be to write the Secretary a blank check with a very large space for the dollar amount. There is practically no limit to the powers delegated by this bill, restricting only to mortgages (very broadly addressed) and $700B (!) of federal holdings at any time.
Someone is going to make a LOT of money off this ... just like those who did setting up this house of cards.
Oh, and that little bit about the $11T debt cap? That puts me personally on the hook for upwards of $200K, which sadly I can’t exactly spare.
Those holding the mortgage. They got a good deal on 'em precisely because there was substantial risk that the notes wouldn't pay off. They gambled, they lost, the buck stops with them.
The whole motive of the banking system IS the risk of non-payoff. I deposit money in a bank and get paid an interest rate precisely because there is the chance that it won't be there when I go back to withdraw my money. That money may be "insured" by FDIC, but even there the "payment" of having that insurance involves the risk that FDIC can't pay up. Ditto with investments: while you'll probably make a profit from an investment, there's the chance that you won't - and that profit comes precisely because of the odds that you won't get even get your investment capital back. In this case, big banks invested in big high-risk mortgages - and lost the bet, so it's up to them to eat the results or go bankrupt.
Of course, the "eat the results" sentiment in turn does ripple back through other companies & individuals - but those relationships were VOLUNTARY, and in turn were gambles that the risk would pay off, which it didn't. Those involved pay pursuant to their involvement; those not involved shouldn't.
We're faced instead with the feds trying to short-circuit this natural voluntary chain of risk & responsibility, spreading the cost of failure across EVERYONE. Great, now I have to cough up $7000 for my imputed share of this debacle; thing is, I don't have $7000 to cough up ... I can barely swing enough to cover the deductable for insurance-covered roof damage.
At what point do people, in large numbers, just give up and start dropping out of the system? Some debt-free property, a large garden, and a little home business can go a long way to living independently of such nonsense.
That question needs to be asked of Obama: What assurance do we have that Frank Raines would not be your Treasury Secretary?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.