The theory underlying the bailout plan stalled in Congress is that rescuing the finance industry will restore market stability and that the benefits will eventually trickle down to average Americans. Thus, solving the subprime mortgage crisis has morphed into a much larger challenge: reassembling the architecture of the financial markets, which seemingly requires giving the Treasury secretary nearly a trillion dollars and extraordinary latitude to pick winners and losers.
There is an easier and more politically palatable fix: Pay off all the delinquent mortgages.
The financial crisis is a liquidity crisis, yes, but it is ultimately a product of homeowner failures to pay. Unless this fundamental problem is fixed, we will continue to see -- and need to treat -- the symptoms. The proposed bailout ignores this. Yet the sum being demanded from taxpayers is almost certainly more than sufficient to pay off all currently delinquent mortgages.
Here is Lambert's take on why they want a more expensive bailout.
Academics…. Look, there’s only one problem here, as the infestment bankers running the “crisis” scam see it: The American people have a trillion dollars, which they would otherwise foolishly throw away on things like universal healthcare, or SUPERTRAINS, or solar and wind power. And the infestment bankers want that trillion, so that the American people don’t make such unwise decisions. And to that end, they’re inflicting financial shocks on the American people, until they give it up. It’s really that simple.
Also, It does not fix the regulation problems. For Wall Street that is not a problem. In other mess ups they got millions, sometimes billions. Now they get trillions. Next time they get quadrillions.( I had to look that up)
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