As was predicted the government has once again decided to throw money at a festering soar in our economy. Between this and the ban on short selling this is really starting to sound an awful lot like socialism. The glaring problem with this plan is that the government is anticipating making money off of these toxic loans they plan on purchasing. Wrong! If these loans were income producing the banks would keep them for themselves. The only reason they have to sell these loans to the government is because they are so toxic that nobody else wants them. These loans that the government is buying with our money will never be paid back. The assets these loans are attached to cannot even be sold on the market for the value of the debt.
The government is effectively rewarding these companies for being fiscally irresponsible and setting them up to do it again. In other words they are giving these companies cash and the companies are giving the government the same loans that caused them to need a bail out. How does thats solve anything?
This bill will be passed. When it does we will own the toxic loans which caused this problem. Are we really this stupid? No. Well maybe yes. If you consider heroin addicts stupid. Because thats what we are. We are credit addicts. We need that credit. We crave that credit. These bail outs are effectively us shooting up. Eventually this will end. We will have to go through with drawl. And it will be the worse kind of with drawl. Forced.
“The Bush administration is asking Congress to let the government buy $700 billion in toxic mortgages in the largest financial bailout since the Great Depression, according to a draft of the plan obtained Saturday by The Associated Press.”
— Justin of Vizionkc