Game over
This is game over for the free market. Game over for the United States fiscal future.
If you’re an American citizen, you need to read this.
Heck, if you’re not an American citizen, you need to read this.
If you’re an American citizen, you and your children are bound by this bailout and its terms. You and your children will be responsible for repaying it.
Pay attention to section 8.
If you don’t like what you read here, contact your Senator and Representatives NOW. Give them this simple message: if you vote this in, I will vote you OUT.
Source: New York Times
LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY
TO PURCHASE MORTGAGE-RELATED ASSETS
Section 1. Short Title.
This Act may be cited as ____________________.
Sec. 2. Purchases of Mortgage-Related Assets.
(a) Authority to Purchase.–The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.
(b) Necessary Actions.–The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:
(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;
(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;
Commentary: It’s shocking to see contract law itself invalidated in legislation.
(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;
(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and
(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.
Sec. 3. Considerations.
In exercising the authorities granted in this Act, the Secretary shall take into consideration means for–
(1) providing stability or preventing disruption to the financial markets or banking system; and
(2) protecting the taxpayer.
Sec. 4. Reports to Congress.
Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.
Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.
(a) Exercise of Rights.–The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.
(b) Management of Mortgage-Related Assets.–The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.
(c) Sale of Mortgage-Related Assets.–The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.
(d) Application of Sunset to Mortgage-Related Assets.–The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.
Sec. 6. Maximum Amount of Authorized Purchases.
The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time.
Commentary: Key point there. At any one time – the Secretary *has* a blank check as long as he keeps the aggregate amount under $700 billion, just like you can max out your credit card indefinitely as long as you stay below your limit.
Sec. 7. Funding.
For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.
Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Commentary: Treasury Secretary Paulson has been made immune from prosecution and basically been given a blank check to do whatever he wants with regard to the government bailout. Congress has given the Treasury the legal right to say that whatever the Treasury does is the law, and therefore cannot break the law.
Sec. 9. Termination of Authority.
The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.
Sec. 10. Increase in Statutory Limit on the Public Debt.
Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.
Commentary: Congress last increased the debt ceiling to $9.815 trillion on September 28, 2007. This adds $1.5 trillion to our childrens’ bill, because there’s no way in hell we’re paying this off in our lifetimes.
Sec. 11. Credit Reform.
The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.
Sec. 12. Definitions.
For purposes of this section, the following definitions shall apply:
(1) Mortgage-Related Assets.–The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.
Commentary: if this were truly about helping America, it’d be restricted to residential and commercial mortgages only, not the insane derivatives, CDOs, CDSs, and other financial bets placed by investment banks on top of mortgages.
(2) Secretary.–The term “Secretary” means the Secretary of the Treasury.
(3) United States.–The term “United States” means the States, territories, and possessions of the United States and the District of Columbia.
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The more I hear and read about this “bail out” the more and more furious I become.
It doesn't say he has a blank check. It says he has a $700,000,000,000 check very specifically. The rest says the Secretary is the final decision maker regarding the matters that the Secretary is given under the law. My assumption is that there may be laws on the books specifically prohibiting the Secretary from taking these actions under normal circumstances. That section just says in the limited circumstances described in the law, the Secretary's actions are legal.
Regarding your headline, it's easy to make the argument that once you allow people to form corporations to limit their liability, the market is no longer truly “free” anymore. Certainly not equitable at the very least.
The more I hear and read about this “bail out” the more and more furious I become.
It doesn't say he has a blank check. It says he has a $700,000,000,000 check very specifically. The rest says the Secretary is the final decision maker regarding the matters that the Secretary is given under the law. My assumption is that there may be laws on the books specifically prohibiting the Secretary from taking these actions under normal circumstances. That section just says in the limited circumstances described in the law, the Secretary's actions are legal.
Regarding your headline, it's easy to make the argument that once you allow people to form corporations to limit their liability, the market is no longer truly “free” anymore. Certainly not equitable at the very least.
So what can we do to stop it? I think giving him a blank check is a disaster- any blank check is a disaster.
There are some amazing testimony given before Congress this week, available over on CSPAN radio- Lots of problems, and the finger in the dike approach is just worse than letting some things implode and clean up afterwards.
It's blank in the sense that it's not a fixed $700B. It's a debt ceiling, so he can buy as much as he wants as long as some of it gets sold off to stay under the $700B ceiling.
Contact your elected representatives with every tool you have at your disposal and urge them not to give the keys to America to Paulson and Bernanke.
Thanks for bringing attention to this matter, most people have no idea the future repercussions of such a drastic move. This whole situation is very sad, many people will be affected by this bailout.
So what can we do to stop it? I think giving him a blank check is a disaster- any blank check is a disaster.
There are some amazing testimony given before Congress this week, available over on CSPAN radio- Lots of problems, and the finger in the dike approach is just worse than letting some things implode and clean up afterwards.
It's blank in the sense that it's not a fixed $700B. It's a debt ceiling, so he can buy as much as he wants as long as some of it gets sold off to stay under the $700B ceiling.
Contact your elected representatives with every tool you have at your disposal and urge them not to give the keys to America to Paulson and Bernanke.
Thanks for bringing attention to this matter, most people have no idea the future repercussions of such a drastic move. This whole situation is very sad, many people will be affected by this bailout.
The FAT CATS are just getting FATTER…THANKS TO THE BRAIN DEAD taxpayer. They don't say anything,don't do anything…. They continue to let these empty suits elected politicians and Bankers take their hard earned money. By this inaction and lack of interest other than reading the paper is a tragedy and so very SAD. The people have been screwed big time once again
The FAT CATS are just getting FATTER…THANKS TO THE BRAIN DEAD taxpayer. They don't say anything,don't do anything…. They continue to let these empty suits elected politicians and Bankers take their hard earned money. By this inaction and lack of interest other than reading the paper is a tragedy and so very SAD. The people have been screwed big time once again
This is insane. I've written all my elected critters and that useless POS Speaker of the House. I doubt it will do any good. Face it, we're fucked. I let my Rep and the Senator that's up for election if they vote for this, I'm voting against them.
This is insane. I've written all my elected critters and that useless POS Speaker of the House. I doubt it will do any good. Face it, we're fucked. I let my Rep and the Senator that's up for election if they vote for this, I'm voting against them.
I appreciate your insight into the “ridiculous” but now “ludicrous” acts of the government. Basically we're all screwed. The best part is how this bail-out could be for absolutely nothing. It could all collapse after this with some other company going under. There are no guarantees that this will work even short term. I say let the dice fall where they may becuase ultimately they are going to do whatever they want and there's nothing we can truly do about it except hack our way into the 700 and send huge checks to everyone in America. That would be something huh?
What ever happen to “We the people”, or did they rewrite that too ?
I appreciate your insight into the “ridiculous” but now “ludicrous” acts of the government. Basically we're all screwed. The best part is how this bail-out could be for absolutely nothing. It could all collapse after this with some other company going under. There are no guarantees that this will work even short term. I say let the dice fall where they may becuase ultimately they are going to do whatever they want and there's nothing we can truly do about it except hack our way into the 700 and send huge checks to everyone in America. That would be something huh?
What ever happen to “We the people”, or did they rewrite that too ?
Looks like we're living in a New Age whether we like it or not. We shall see more and more of our American way of life fade away and more of our personal freedoms trampled on. We should stand up against tyranny whenever possible but not panic. Let us not give into fear and panic in the days ahead. It was foretold thousands of years ago that a time was coming in which many people would drop dead of pure fear because of these extremely perilous situations but not to be afraid. These things had to happen. Be of good cheer, there are people who have the ability to make unusually wise decisions in the midsts of these crisis if we pray and encourage each other. We can live simple and help each other out more than we do. I appreciate being able to read and understand from you. CW
What next? World currency. Not too distant future.
What does approval by a moderator mean. Is there a little gnome reading my comments making a decision whether to post it or not?
Looks like we're living in a New Age whether we like it or not. We shall see more and more of our American way of life fade away and more of our personal freedoms trampled on. We should stand up against tyranny whenever possible but not panic. Let us not give into fear and panic in the days ahead. It was foretold thousands of years ago that a time was coming in which many people would drop dead of pure fear because of these extremely perilous situations but not to be afraid. These things had to happen. Be of good cheer, there are people who have the ability to make unusually wise decisions in the midsts of these crisis if we pray and encourage each other. We can live simple and help each other out more than we do. I appreciate being able to read and understand from you. CW
What next? World currency. Not too distant future.
What does approval by a moderator mean. Is there a little gnome reading my comments making a decision whether to post it or not?
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I’m really impressed with your article, that was exactly what I was looking for.. it was certainly a great read for me, I’ll be looking forward for more of your articles cause that’s one of the best I’ve read recently. Keep up the good work
I’m really impressed with your article, that was exactly what I was looking for.. it was certainly a great read for me, I’ll be looking forward for more of your articles cause that’s one of the best I’ve read recently. Keep up the good work