Paul Krugman: Paulson's $700 Billion Plan Called "Cash For Trash"

NY Times :

Some skeptics are calling Henry Paulson's $700 billion rescue plan for the U.S. financial system "cash for trash." Others are calling the proposed legislation the Authorization for Use of Financial Force, after the Authorization for Use of Military Force, the infamous bill that gave the Bush administration the green light to invade Iraq.

There's justice in the gibes. Everyone agrees that something major must be done. But Mr. Paulson is demanding extraordinary power for himself -- and for his successor -- to deploy taxpayers' money on behalf of a plan that, as far as I can see, doesn't make sense.

Read the whole story: NY Times

Comments

[AceInTheHole]

THE SKY WON'T FALL IF WE POSTPONE THIS SO CALLED BAILOUT UNTIL AFTER THE ELECTION!

THEN LET OBAMA AND THE OTHER GROWN UPS HANDLE IT.

OTHERWISE THIS MISCREANT SCAM CAN DESTROY THE COUNTRY AS WE KNOW IT, IF IT IS ALLOWED TO GO FORWARD.

AGAIN, POSTPONE THIS SO CALLED BAILOUT UNTIL AFTER THE ELECTION.

[BernieBernie]

Hello People,

Please, I beg of you too contact your State representatives and pressure them to vote No on this fraudulent proposal. This is nothing more that fear tactic by the Bush administration to coverup the corruption in Washington and on Wall street. The money is not intended to be used for the mortgage crisis. The intent is to bailout mismanagement of Corporate banking executives failure to follows Federal Laws that governs our deposits and investments. The monies should and could be used to payback individuals who made earnest deposits and investments with their money.The crooks should be prison for the crime they have committed against our people. If this bill is passed. We will still be confronted with more problems in the near future. I urge you to contact your representatives to vote No. People this is the biggest coverup in American History! Don't Be Stupid, It's time for us to act Now!

[AmericanVoice]

i say lets fire paulson, how about that, for passing a clean bill. where was paulson when they stealing the all money??? now he doesn't want a dirty bill for wall st., which would exclude main st., paulson if i were president, i'd fire you.

[mangojammer]

"The logic of the crisis seems to call for an intervention, not at step 4, but at step 2: the financial system needs more capital. [...] they haven’t been able or willing to provide the credit the economy needs. "

Why not eliminate the middle man (men) and use the $700 billion to start a new bank (the "National Bank of America"; the "Main Street Bank" whatever you want to call it)?

[TJC]

Who owns these mortgage backed securities? I believe they are spread all over everywhere to individual investors, 401K, pension plans ect. Surely no one is 100% invested in these securities and they have a balanced portfolio. Why do we have to pay for something that is now worthless. I could understand if the tax payer got the colateral(homes) for this bail out but we are not. All future home loans should have a FED number attached to it so they can be traced back and lenders held accountable. Accountability Accountability Accountability!!!
This surfaced two years ago and they kept a lid on it until it boiled over!

[jsgaetano]

I have a far, far better idea. Instead of just GIVING our money to these robber barons, why not give it to the people who have had their houses foreclosed on, and they give it to the mortagage companies?

Either way we are footing the bill for it, but at least people get to keep their houses. Not only that... but this will also allow some accountability to enter into it, and those people who filed fruadulent loans can be weeded out and brought to justice. It would be pretty easy to figure out, too: either you notice someone applying for a mortgage bailout is committing fraud... and they are caught. Or, they don't file for a mortgage bailout, you investigate why not, and discover if there was or wasn't fraud involved in the original loan.

If we are going to squander $2 trillion, I'd be happier knowing we helped a good many Americans, rather than just provided (even more) corporate welfare to the culture of corruption.

[triplbee]

Easy folks. There has to be some sort of rescue plan here or else the global banking system will collapse. Try buying a house or a car without a loan and you will quickly understand how important it is to be able to borrow from a bank. That being said, much of the bailout should include a bailout of consumer debt so that average people actually benefit from the huge debt they'll be asked to shoulder. Also, much tighter regulations need to be in place for the finance sector. If they want taxpayer money to save them from their own greed, then the days of $25 million bonuses are over.

[mcostello]

Those bonus's should be taken back and put in the general treasury.
The whole system was a fraud, and those guys knew that this bailout was coming.

CRIMINAL!

[triplbee]

I completely agree that if these bums want middle class tax payers to bail them out then they will have to significantly reign in their compensation.

[castlerider]

I really appreciate Krugman for writing this piece.

In early March of '07, Krugman wrote an article predicting the great market meltdown of '07 in a very ironic way, predicting it by presupposing the date as a year later, looking back at what caused the crisis.
It's so dead-on accurate, it's scary to read. Look it up. You can google it by the date which I believe was 3-6- '07, or as "Great Market Meltdown".
Reading this, one can see that for a general part of the time, Mr. Krugman really does know what the hell he's talking about. If Congress has any sense, they will absolutely take heed...For that, like I said:

I really appreciate Krugman writing this piece.

[mcostello]

Or read Andrew Bacevich. He was shocked by the fact that after testifying in congress, the congressional leaders that he spoke with had no clue how to fix the situation.
And the real situation is not fixed, and that is that WE are living beyond our means by borrowing foriegn money to fund our government.

[Texvol]

Just say no!

[hellboundtrain]

The Paulson Plan is unworkable.

That is all.

Let them fail.

[booker52]

Call your Senator and Congressmen and tell them no bail out. This is crap!! Tell them the only thing you want to see is a return to the law that stopped this from happening again!!!

[princessofnowt]

NO BAILOUT WHATSOEVER!!!

THIS IS A SET-UP. WATCH IT MULTIPY.

Click here to say no to your reps:
http://www.usalone.com/help_people_instead.php

Link to article about exactly what's in it for Paulson, his cronies, and how they set this all up:
http://www.usalone.com/help_people_instead.php

[evekendall]

The two links you gave are the same thing. Is there another link you have that goes to the article you mentioned?

[SURRYMARK]

Krugman ends his piece with:
"— if this plan goes through in anything like its current form, we’ll all be very sorry in the not-too-distant future."

Here is a more likely scenario. If Congress turns all this money over to Wall Street, Bush's #1 priority will be to get it all spent before Obama takes the oath. Then, when it all comes to doodoo, the Republicans will be slitting the Democrat's throats, and the dems will be doing what they always do . . .

[lather444]

Let me see if I have this right.

Wall street now wants to sell me assets they don't even consider worth the money? They lived high off the hog buying everything and anything imported from countries in direct competition with us so we could admire and envy them driving their bmw's and lexus's wearing french stitched leathers and Italian shoes and purses while the rest of us worried about how to save money on our utilities and worked two jobs to make ends meet.

Now the same wall streeter from Goldman Sachs wants a trillion dollars so they can do it all again?

Come on!! These people gambled their money away and now they want access to my wallet? We need a big tea party again not a bailout!

Lather

[Kindheart]

When one of Bush's cronies tells us we must act now, that means that most of us have to head for the hills. Paulson until 2 years ago was part of this problem. If he said that we had this problem 2 years ago, he could be better believed.

Write Congress and tell them to stop this "gun to the head" bill.

[iconoRob]

I have a suggestion, that we all change the name of the Republican Party or at least no longer refer to it as such, in the wake the consequences from yet another "free unregulated markets" MEGA bailout, to the more accurate "SOCIALIST BAILOUT PARTY FOR FAT CATS" !!!

[princessofnowt]

PAULSON IS A CRIMINAL AND A FRAUD.

DON'T LET HIM HAVE ANOTHER RED CENT!!!!!

http://www.marketoracle.co.uk/Article5480.html

and tell your reps HELL NO!!
http://www.usalone.com/help_people_instead.php