Is our government going to pay to bailout mortgage companies and such at the amount that the mortgage companies actually have in the loans or WTF are they going to do? I am just a brain damaged auto collision tech and the bondo dust between my brain cells gets a shaking just trying to figure out what they hell they are doing? How is this going to work? All I could gather from George Stephanopolous (I don't even want to know how to spell that, he should change it first) was that they are going to give Paulson total control and so far the language says that nobody can stop him from doing what he wants...no oversight. I want his job if that happens. I think I am going to go buy a new big screen tv, because if my debt is going to be 450,000 dollars...why not add a couple grand for a bitchin tv?
The single worst thing about the bailout plan I've heard, is that it basically allows the Treasury to buy these things at "market value" or even above. Which, frankly, sucks. Back in the 80s when the government was bailing people out, it took over the debt from companies that had already gone tits up. So they basically got the bad debt for free. In this case, the proposal is to buy it (for whatever Paulson is willing to pay for it) from companies before they go bankrupt. This has the positive effect of keeping the company in business, but the negative effect of shifting the entire risk to the buyer (us taxpayers) who are going to pay more than 0 for something that has, really, a very unknown and iffy value. I'm just a simple economics professor, and even though I've seen the logic behind the recent bailouts up to this point (Bear Sterns, Fannie and Freddie, and AIG) but I'm not seeing the benefit of this, which has been aptly described as a blank check.
Take all the money you have and go gamble it in Vegas. Don't worry if you lose it all, we'll repay what you lost.
The interesting thing about all this is that it's basically taking away the next president and congress' allowance.
