A stream of future cashflows from people who are paying their mortgages.
Some of them will default, but most won't. So the paper we are buying is going to be worth something down the road. That;s why the 700 billion Paulson is asking for should be viewed as an investment. The question, however, is whether it's a good investment, and that all depends on the price the government pays for it. I'm inclined to think Paulson is going to overpay, which is why I oppose it.
Fair enough. Rather than nothing for our money, we get mortgage payments from those who make their payments. Of course, in many cases, the mortgage is for far more than the property is worth. And it now appears that bad auto loans and bad student loans and bad credit card debt and who knows what else will be eligible for the bailout.
Taxpayers have no assurance of getting anything of value for their money. Everything is left to the discretion of an unelected official, who has said he would pay above market prices.