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Why a $700B bailout should not be done

Current Events, Finance

- Responsibile taxpayers should not be liable for irresponsible Wall St decisions
- Largest bailout in the history of any country in the world
- Handing over of Wall St to Penn Ave
- Other sectors and companies will also want a bailout
- Moral hazard
- It does not not guarantee to solve the problem
- It does not address the fundamental problems (overleverged and falling home prices)
- There has not been a clear case made on what exactly would happen without such a bailout
- There will be a request for even more money if it does not work
- Corruption is inevitable with so much money at stake
- Will double the yearly federal budget deficit
- Assets will be unloaded to the government above current market prices
- No guarantee of any buyers after the government buys them
- The FED/Treasury have never been honest about the situation. Before they say the subprime is contained, now they say that they must act soon.
- The FED/Treasury have been trying many different measures for the past year to control the problem, but has not been able to. Why should we believe they can do it now?
- Sounds so much like blackmail, "Give us a blank check and unlimited power by the end of the week or the whole financial system will collapse."
- Bernanke and Paulson have never publicly stated that a financial collapse is imminent.
- No time for a full debate among Congress
- No figure given on the chance of a total collapse. What is it - 100%, 50%, 5%?
- Paulson is leaving office this year. $700B can make a nice golden parachute.

Posted: 2008-09-24 22:25:25


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