Make the Banks Pay the Government Back or Foreclose on Them

Among the many details, actually more like major foundational points than details, that have not been disclosed in the huge socialism for the banks program is the price that the government is going to pay for the "troubled' assets that these Einsteins bought.

If the problem, as "Hank" Paulson repeated all over the Sunday morning shows, is that there was no way to value the assets, the price is obviously going to be arbitrary. So, why don't we consider it a loan?

Whatever the banks get now is a provisional advance against the collateral of the assets. If the government can sell them for the price it paid, then all is square, except the banks should pay some interest on the money they are using. How about 2% for the first year and then, oh, LIBOR plus 5% after that.

If the assets are not worth what the government paid, then the banks should pay the difference, over time, with more interest. If the banks cannot pay it, then the government forecloses on the banks. No bonuses either.

Sauce for the goose.

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Comments

[tompoe]

Nice idea, but not enough time to make it work. We've already had one hedge fund take their money and run. No bankruptcy, no sleaze, no corruption, no bailout. They just distributed unbelievable profits, and left. Imagine, had Paulson and Bush gotten this bailout thing through, there could have been one more hedge fund in the mix to help keep the scam going. Now, Paulson has to explain why the hedge fund doesn't want to play Wall Street anymore. See? Dems balk, and now the world crashes before our eyes.