Sunday, September 28, 2008

Congress Outlines a Bailout Plan: Everyone will be Watching

~Congress has created a broad outline of a rescue plan to prevent economic devastation after a historical surge of bad mortgage debits collapsed several financial institutions.

By Tiffany Shorter

Progress has finally arrived after over ten days of petty politics. Taxpayers, Wall Street and world stakeholders are keen to know the details.Democrat House Speaker Nancy Pelosi says there is an outline agreement but the particular conditions remain to be articulated. A vote is planned in the House of Representatives Monday. Congress wants to assure American taxpayers and foreign investors that the US economy can recover from this set back. Announcing the plan today is a good way to start the opening of the markets tomorrow. Main Street, the coined term that the media uses to describe ordinary taxpayers, have complained that they don’t want their tax dollars going to help the wealthy on Wall Street.

Washington has failed to emphasize that without this bailout, many institutions cannot borrow the funding needed to cover operation costs. Such expenses put workers’ salaries are at risk. Main Street may not get a paycheck with the credit markets frozen due to the lack of government intervention at this time. Wall Street’s woes also affect the world markets. They worry about the demoralizing effect if a plan is not executed soon.

Europe and Asia saw falling stocks prices Friday partly due to the surprising collapse of Washington Mutual, the largest US savings and loan group. If countries lose faith in the US, they may pull their investments and refuse to lend to America. Emerging markets such as China could decide to invest inward, in their domestic economy, which would be more bad news for all Americans. The deal, a two-year plan, proposes that the government spend $700 billion to purchase bad mortgage-related debts from banks. To fund the bailout the treasury must borrow from the money markets by issuing more government debt. This deal gives the treasury secretary authority to monitor the execution of the deal, but critics want greater oversight and reporting.

Republicans, who claimed to be isolated from earlier talks, are satisfied with the condition of insurance program for mortgage-backed securities. Democrats won a measure of limiting executive salaries for companies that want financial assistance. Pelosi's office said the new agreement would immediately issue $250 billion, and another $100 billion would be spent under the discretion of President Bush.The remaining $350 billion is on hold until Congress reviews and approves of conditions of its release. More details are in development. What is known is that Congress must vote for this bill by Monday- Tuesday the latest.
We should all hope it is a sufficient start to prevent a further downturn and restore confidence in the US economy.

~Tiffany Shorter-is a blogger on Hip-Hop Republicans and active international affairs activist. Before joining Hip-Hop Republicans, she was a member of Republicans Abroad Belgium responsible for coordinating outreach events and political discussions. She has come to New York after living in aboard in Belgium where she earned a Master's degree in International Law from the Brussels School of International Studies.



Anonymous said...

The bailout plan is only the end result of a long-term failed economic policy. Conservatives question the wisdom of "tax and spend" liberals, while spending at at equal or greater rate and cutting taxes. The resulting massive deficit is predictable to anyone who passed 3rd grade math. The Bush administration encouraged the sort of unrestricted profit-taking that fueled the buildup before the inevitable financial bust. I don't know if Sen. McCain will prove to be enough of a "Maverick" to buck the trend of the previous Republican presidents. His record would suggest that while talking a tough fight he would continue in the manner of Reagan/Bush. I doubt whether the country can afford another 4-8 years of the same.

Drew D. said...

Try laying off the kool-aid. Learn some economics and then try speaking. Instead of doing what most of you liberals do, which is THINK you know something and then just talk out your ass. You liberals are amazing when it comes to just plain ignorance. If it rains outside you will tell us all that Bush did it with his little weather controlling joystick on his desk. If the sun goes down it's because of the Republicans black hearts. If it wasn't so sad and tragic it would be comical. Your beloved DEMOCRAT ran institutions are what ran us into the ground. You can attack the free market and capitalism in general all you what (it's what you people do best.) But anyone who isn't a blind kool-aid injected lib knows better. I wonder sometimes if you people can speak for yourselves for once. Or is that too much to ask. Must you have to get ALL your little slogans off Obama bumper stickers? I swear I think you just copied and pasted Obama's socialist rhetoric and put it on here. Let's face it, when it comes to economics liberals are brain dead. As a matter of fact anything that can't be solved with "hugs and smiles" is beyond the left. Which by the way is pretty much everything. At the very least change the flavor of that Kool-Aid anonymous, your tongue will stain. Tah tah.

Anonymous said...

Typical NeoCon response. You managed to be remarkably defensive without addressing any of the valid issues I raised in my previous comment. I'm not a Socialist nor am I against capitalism or a free market economy so much as I'm against Plutocracy. Democrat-run institutions? Do you mean other than the Executive, Legislative (save for the last 2 years) and Judicial branches of our government? Get Real. And what's the deal with Kool-Aid? Was that meant to imply a lack of sophistication or taste? You've proven my point about conservatives by your thin-skinned rant. Conservatives feel entitled to dish it out but overreact to the slightest criticism.

Drew D. said...

"NeoCon", typical Socialist verbage. "Valid issues?" Let me know when you bring some up. As for the Kool-Aid you consume it just like the rest of your brainwashed cult. Judicial, Executive, and legislative branches run private firms? Get real. Maybe they do in your favorite Socialist countries which is what you wish we were I'm sure. Coming from a Dem that espouses endless, useless, regulation I'm surprised you would ever BLAME gov't for anything. Oh wait, you'll blame them if a Republican is in office, I see. You would blame congress just as fast if you didn't have the majority.

You Dem's are simply amazing. No matter what the issue, no matter what the problem, it's the "NeoCons" fault. As for my "rant" it's totally justified when it comes to dealing with an enemy of the state. Hey your a lib, you should want to try and "understand me" and appease me. That's what you guys are all about when it comes to dealing with the enemy isn't it?

Fannie Mae/Freddy WEREN'T run and supported by Dem's? Criminal and Obama ADVISOR (big surprise) Franklin Raines was who? The people that consistantly interfered with every attempt to fix these places? Oh that's right, Chris Dodd and Barney Frank, which belong to which party? After all, why would they try and fix place that has served as their piggy bank for years.

"Unrestricted profit-taking" is what led to this "financial bust". Sounds socialist to me but then again I'm just a "NeoCon." Seems like capitalism is the problem when it was socialism that created it. The "a house is a right" theory of the left is what got us here. FORCING these insitutions to make loans to unqualified applicants is what led to the downfall. Not the "capitalist profit-taking pigs."

We "can't afford another 4-8 years of the same?" Your right, I'm sure Obama with his trusty housing and mortgage adivsor Raines will set things straight. A trillion dollar spending bill and across the board tax hikes will do wonders for the economy. I know I know those darn Republicans have been spending just as much. And we will only tax the "rich" right? I keep forgetting to tax and spend is "wise" in your eyes. K
eep enjoying that Aid.