I think one of the biggest questions raised is what if?
4) What if it fails? The plan does not give any consideration to what would occur if this authority failed to solve the current crisis. Those reasons could potentially include risk from other private sector failures outside of mortgage-backed assets, international financial services failures, lack of willing sellers, lack of willing buyers, an understatement of the depth of the problem or the financial commitment needed to abate it, or even the fact that the program might work according to planned but produce no beneficial impact.
Leslie has the complete list.
Second, The Heritage Foundation says that any bailout must (1) restore the markets and (2) protect the taxpayers. They also call for any legislation to be free of other programs, projects and pork. They give a good analysis of the good and the bad in the current proposal, along with proposals that should NOT be included as Congress goes forward.
Third, we have this post, The Bargain for the Bailout, on The Next Right. Author Ironman speculates that, despite issues with the bailout, both Republicans and Democrats may find it impossible to vote against it. So he recommends some 'conditions' upon which to base a vote.
Some prominent Democrats must demonstrate a level of responsibility for this disaster before Republicans allow themselves to be roped into looking like die hard Dubya loyalists.
The quid: The chairman of the Senate and House Banking Committees---Chris Dodd and Barney Frank--must relinquish their chairmanships as a condition for Republican yes votes on the bailouts.
2 comments:
Maggie,
Can we also add to this list that the proposed legislation is not an excuse to increase the scope and scale of the welfare state? Some of the proposed additions under discussion will have far-reaching consequences.
As stated on my Blog.
PLEASE READ WALTER WILLIAMS!!
Below is piece of a recent TownHall.com article of his.
"Many politicians and pundits claim that the credit crunch and high mortgage foreclosure rate is an example of market failure and want government to step in to bail out creditors and borrowers at the expense of taxpayers who prudently managed their affairs. These financial problems are not market failures but government failure.
The Community Reinvestment Act of 1977 is a federal law that intimidated lenders into offering credit throughout their entire market and discouraged them from restricting their credit services to low-risk markets, a practice sometimes called redlining. The Federal Reserve Bank, keeping interest rates artificially low, gave buyers and builders incentive to buy and build, thereby producing the housing bubble. Lenders were willing to make creative interest-only loans, often high-risk "no doc" and "liar loans," in order to allow people to buy more housing than they could afford. Of course, with the expectation that housing prices will continue to rise, it was no problem for lenders and borrowers but housing prices began to fall, leaving some people with negative home equity and banks in trouble.
The credit crunch and foreclosure problems are failures of government policy. In fact, what we see now is a market correction to foolhardy government policy. Congress' move to bailout lenders and borrowers who made poor decisions will simply create incentives for people to make unwise decisions in the future.
English philosopher Herbert Spencer said, "The ultimate result of shielding men from the effects of folly is to fill the world with fools."
TAHL
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