Bailout Details

There are 3 main reasons why I think this bill failed. 1) The $750B could be used to "repurchase assets troubling the US Financial System." This doesn't mean US assets. The Treasury had full plans of purchasing Europen and Asian failing assets. 2) During the Savings and Loan crisis, 4,000 banks failed. During the current crisis, it is less than 75. 3) Henry Paulson -

A quote from Congressmen AKIN of MO, "My colleagues, a week ago we were approached by Secretary Paulson, and he told us that there was a crisis and that he had a solution. He gave us the horns of a dilemma, two sharp, shiny points that we could impale ourselves on. One, that the financial system was going to collapse and implode, and the sky was going to fall. Certainly we wouldn't want to choose that. The other, we could write a $700 billion blank check. Those were our two choices.

The Details: - and I predict...Henry Paulson will go down as the single worst Treasury Secretary in the history of America.

• Provide up to $700 billion, starting with an initial $250 billion, to allow the Treasury Department to purchase troubled assets, mainly in the area of mortgages, that are weighing down the U.S. financial system.

• Give the Treasury Department, working with experts chosen by the government, the authority to fashion the asset purchase program. Treasury officials have suggested that a key approach will be the use of "reverse auctions" in which financial firms who succeed in selling their assets to the government will be the ones willing to take a lower price than other bidders.

• Impose restrictions on the pay and benefits received by executives whose companies are selling some of their bad assets through the government's purchase program.

• Require the Treasury to provide details of its purchases within two days of the transactions; various oversight boards would be created to monitor the operation of the program.

• Give taxpayers ownership stakes in companies whose bad assets are purchased. After five years, if the government is facing a loss in the program, the president would be required to submit a plan recommending how the money can be recouped from financial companies.

• Establish a program for banks to buy government insurance that would cover the principal and interest on certain troubled assets, rather than selling them outright. Premiums would vary depending on the assets' risk profile.