Bernanke: Grave threat demands plan's passage

MarketWatch ^ | Sept. 24, 2008 1:29 p.m. EDT | Greg Robb & Robert Schroeder, MarketWatch

[Ernest_at_the_Beach]

WASHINGTON (MarketWatch) -- It is imperative that Congress pass the administration plan put forth by Treasury Secretary Henry Paulson to buy up to $700 billion in toxic debt because of the grave threat faced by a severe credit crunch, Federal Reserve Chairman Ben Bernanke said Wednesday.

Members of Congress practically begged Bernanke for a rationale for passage of the controversial plan that they can take to their constituents.

In response, Bernanke replied that every American would feel "direct" negative effects if the credit crunch was allowed to continue or worsen. He said it would be difficult for consumers to get auto loans and for small businesses to expand.

"Our modern economy cannot grow, cannot create jobs, cannot provide housing without effectively working credit markets," the chairman told the Joint Economic Committee a day after being grilled by members of the Senate Banking panel.

"My only concern here today is to try to find a solution that will stabilize credit markets so they can do their job," Bernanke said.

Credit markets were the "plumbing" for the "lifeblood" of the U.S. economy, according to Bernanke. If consumers and businesses go to turn on the tap and credit is not available, the economy would face a "grave threat."

Members of Congress continue to be uncomfortable with the $700 billion price tag. Still, no one on Capitol Hill has ever said that the plan was dead.

One member argued that restricting car loans and small business loans was no justification for such a large expenditure.

[rightwingcrazy]

What’s his cut?

[Ernest_at_the_Beach]

Congress and the Dems started the problem with their refusal to regulate Fannie Mae and Freddie Mack,...now they need a disaster to get TOTAL CONTROL of the Government.

Bernake and Paulsen’s plan stands in their way!

[Dawn531]

Good explanation, by Romney, of what we’re facing if the bailout fails:

http://www.glennbeck.com/content/articles/article/196/15555/

[E. Pluribus Unum]

Bernanke: "Ready! Fire! Aim!"

[WilliamofCarmichael]

Some say that the return to the taxpayers could be 7 or 8 percent.

I've read that worldwide there are some 20 trillion dollars invested in corporations and, I suppose, government paper.

700 billion dollars is only 3.5 percent of that, I believe.

I think that there are some 8 trillion dollars invested in U.S. markets.

What is 700 billion dollars of that? About 12 percent, I think.

Let the market sort 'em out.

[jmc813]

Congress and the Dems started the problem with their refusal to regulate Fannie Mae and Freddie Mack,...now they need a disaster to get TOTAL CONTROL of the Government. Bernake and Paulsen’s plan stands in their way!

Anyone who still thinks this is a Democrat/Republican issue is dead wrong.

[A. Morgan]

[loveliberty2]

Some wisdom from an earlier time in America:

"You cannot:
- bring about prosperity by discouraging thrift;
- help the wage earner by pulling down the wage payer;
- further the brotherhood of man by encouraging class hatred;
- help the poor by destroying the rich;
- keep out of trouble by spending more than you earn;
- establish security on borrowed money;
- build character and courage by taking away a person's initiative & independence;
- help men permanently by doing for them what they could and should do for themselves."

These words, often erroneously attributed to Abraham Lincoln, were from Rev. Wm. J. H. Boetcker in "Inside Maxims," in the Year 1916 (see Harper's Magazine, May, 1950, "Lincoln Never said That").

[rintense]

No thanks. I'll risk it.

This plan sucks.

[LomanBill]

[Credit markets were the "plumbing" for the "lifeblood" of the U.S. economy, according to Bernanke. ]

 

In other words.   Buying things you can't afford was the foundation of the U.S. economy. 

 

Must Consuuuuume!

 

Maybe that was a bad idea; a poor foundation to build the house upon?

 

Tyranny of the appetite.

 

 

 

 

Jupiter Island, Jekyll Island,

 

 

Gilliben's Island... 

 

It's tough to tell them apart these days.

[savedbygrace]

This sounds every bit like the Mob guy walking into your retail store and explaining protection payments.

[LomanBill]

>>What’s his cut?

 

He gets to go duck hunting with Dick Fuld and the rest of his Federal Reserve neighbors/pals on Jupiter Island.

 

 

 

[what's up]

I wonder what people here don't get about small businesses and average consumers suffering when money markets.

Of course, that is the direct result if the economy contracts further and unemployment rises, credit card rates go up, housing prices decline, small businesses can't expand, etc..

The rich already have their money...they'll survive just fine. The average Joe's money is about to take a dive.

[Joe Brower]

"No thanks. I'll risk it.

This plan sucks."

Heh. Short and to the point. I concur 100%.

I also look forward to your tagline becoming reality. Palin's one of two reasons I'm voting for McCain. Keeping Obeyme out of the oval office is the other.

[Ernest_at_the_Beach]

Exactly!

[underbyte]

“””What’s his cut?”””

That’s my first thought.

My second thought was that this is a lot worse than they are letting on. Total collapse of the dollar, SS, All bank accounts, 401K’s ? Total collapse of the government possible?

We all know there is a lot more details they are not telling us which makes us think it’s a cheap hustle but what’s really behind the curtain could be much, much worse.

and I am usually an optimist

[LomanBill]

>>The rich already have their money..

 

What the rich have, mostly, are 1s and 0s in cyberspace.

 

They generally produce nothing - and they "own" only what is secured by the illusion of their power.

 

In honor of the Boston Tea Party - it's time to dump some NyLons and T-Bills into NY Harbor.

 

>>small businesses can't expand, etc..

 

Businesses, small and otherwise, that are producing real value within their community will continue - regardless of the status of banker's "credit".

[what's up]

What the rich have, mostly, are 1s and 0s in cyberspace.

No, a huge number of the rich have very large bank accounts.

It's the poor who will suffer as the number of jobs in smaller communities (and cities) start to shrink at the same time as their house values go down.

[LomanBill]

[Total collapse of the dollar, SS, All bank accounts, 401K’s ? Total collapse of the government possible?]

 

 

No. That's only what Bernanke and his criminal Jupiter Island pals want you to think.   This is a protection racket.

 

 

The sun will come up tomorrow, even if they don't get their payoff.

 

The physical infrastructure of the country will still be in place.

 

The truth is that honorable men and women will still go to work and keep the lights on, and food flowing, while this banker's fiasco is sorted out.