The Chris Dodd plan for the economic crisis

Looks decent enough, I guess. Taxpayers need some protection.

It is the Shock Doctrine. They waited till it reached boiling point and shoved it over to Congress so they would be blamed for the mess. Congress should do the minimum and pass a temporary bill to take care of the immmediate cases and hold several more meetings. Don't give full authority to Paulson. They will deepen the mess.

talk, That's what I told Senator Feinstein; that Paulson can't be trusted. He's the one "demanding" $700 billion without any discussion by congress, no oversight, and have the complete freedom to spend that money as he wishes, and he wants it now!

That congress followed in his footsteps to meet his "demands" tells me there's a lot of problems with congress.

I also told Senator Feinstein that this plan didn't have enough variety to fix our economy; chasing money with money is not the best use of money. Our country needs jobs, and Public Works Projects not only create jobs, but will in turn create more jobs and increases the tax base.

I also told her how angry I was, because she voted contrary to my recommendations on two other important issues, and she was wrong on both; especially on the Iraq war.

Right. Look what happened after they stampeded the congress to pass terror legislation after 9/11. Take it easy and make sure its done right. Dont just make some rich sob richer at the expense of the taxpayer. And dont trust this screwed up president and his friends.

At least the GOP members of congress is trying to make sure that any benefit from this bailout will go to the taxpayers who are funding it. Democrats were ready to sign the dotted line before they crossed all the "t's" and dotted all the "i's."

I can't imagine a worse decision than giving the government an equity position in private companies, especially companies for which they have regulatory and oversight responsibility.

That's real socialism.

I can. It'd go like this: bludgeon the country into giving them the money for nothing. The government guaranteeing these private companies already gives the public most of the downside.

Buying defective loans, if properly priced, isn't giving away money. Now, I'm not saying I'm especially happy with that part of the scheme, either. Still, it's way better than a government entering itself into competition with private business that it regulates, and has authority to audit.

roger, In all fairness, those mortgage instruments have very little market value today, and the prices are "really" depressed." If the government does their jobs properly, it can benefit the taxpayers. The 64-thousand dollar question is whether government will do due diligence on that money.

If they are truly properly priced then I don't think it wouldn't be much of a bailout.

I do get your qualm with the anti-competitive nature of that position, but I see any realistic scenario of government intervention as being inherently anti-competitive. I'd support the equity stake so that those companies are dismantled and sold off piecemeal. I wouldn't want the government holding equity any longer than it takes to sell off the good assets and don't much like the idea of merely purchasing the bad assets.

Whats wrong with renagoating the contracts of people who might be able to pay at a lower interest rate and make smaller payments so they can hold on to thier homes. We dont have any qualmes about giveing money to the rich. Why not the poor. how do I get spell ck on these posts.

I don't like purchasing those impared assets. I guess what I'm hoping for is that a significant part of the problem is the old liquidity issue of having current liabilities exceeding current assets. A fair amount of those assets may turn out to have value, but not in a near enough time frame to do any good for those companies holding mortgages that are required to be marked to market.

Wishful thing, perhaps.

I don't think your thinking is too wishful, just too forgiving. I want to see the controlled demise of those companies instead of taking on all their impaired assets and risk and letting them walk away as clean companies.

It should not be a "bailout." It can be many things to increase liquidity during this problem, but it should only be a "loan." The other component of this money is to help main street by creating jobs through a Public Works program.

There are ways to relieve some of this mortgage problem by a) extending the years from 30 years now to something longer, b) reduce the interest rates enough to compare with what banks offer on long-term CDs (about 4% now), and c) make provisions into those loans in the event our economy picks up and most mortgage holders will be able to handle the interest rate compared to their potential earnings on CDs.

Would you personally lend them money right now? Based on the risk assessment I wouldn't. Based on the need to save the system I accept that it's needed.

And to me, giving them loans that they don't qualify for is a bailout.

Paying market value for the "assets" is no bailout at all. Result: Banks fail. This we can't afford.

Money for nothing will serve only to encourage more bad behavior.

If the government is to buy bad paper, (likely valued at 20 to 40 cents on the dollar); it is only reasonable that they also receive a percentage of shares too. Perhaps a formula that determines the percentage of shares at the value the bad paper was purchased initially. I'm no expert; but it seems to me that if you pull the bad paper out of the portfolio, but also pull a percentage of the total equity equal to what was spent on the bad paper: the result would be removing the poison without rewarding the lifestyle that created it.

I also think there needs to be some regulated responsibility to administer to the loans a bank creates. Perhaps a minimum timeframe before banks are allowed to bundle and sell... or perhaps a minimum equity position for any paper included in a bundle. Without some such safeguard; there is nothing to stop the shyster banks from creating more bad paper.

Currently we have:
Bank sells paper seconds after it's written for profit.
New bank sells paper in new bundle for profit.
Government buys bad paper at Loss.
This is a formula for straight thievery.

The initiating bank needs to either be regulated out of their ability to offer such high risk paper, or the initiating bank needs to be regulated into carrying direct responsibility for the paper they write.

I don't like the idea of government getting any more involved than is necessary, so I'd prefer a blanket law that simply makes the initiating bank more responsible for what they write.

Does any bank offer idiotic sub-prime loans if they know they can't offload them until after they've matured into more traditionally stable assets? I think not.

They need money for "liquidity." The assets on their book cannot be valued, because nobody knows how much they are worth. They can "borrow" money like everybody else and pay some interest. Their greed should not be rewarded with a bailout.

Can't get mortgage rates that close to CDs, which are FDIC insured. Somehow, risk has to be factored into the rate.