This is just pathetic. All emphasis added:
At the insistence of House Republicans, some of the program’s $700 billion would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults…
Meaning that the institutions will now have an incentive to hold the securities until that paper is absolutely worthless, thus enabling them to cash-in on their government insurance policies for a minimum guaranteed pay-out no doubt higher than what the market would offer. In other words, this bailout is going to cost much more than the current numbers being thrown at us, and will be a pain in the ass economically for several years, constantly draining the Treasury of funds for infrastructure and other expenditures that are more important.
The proposed legislation also calls for the financial sector to help make up the difference if the government does not recoup its investment in five years, [“a senior administration official who was authorized to speak only on background”] said, but details were unclear.
That’s funny; when someone speaks on background it’s usually because they’re not allowed to speak at all on the subject they’re gabbing about. I won’t be surprised if many of these statements turn out to be trial balloons from the Bush Junta, sent in an effort to manipulate the final form of the legislation and therefore the vote on Monday.
To help struggling homeowners, the plan would require the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers’ monthly payments so they can keep their homes… Democrats insisted on greater congressional oversight, more taxpayer protections, help for homeowners facing possible foreclosure, and restrictions on executives’ compensation.
To some degree, all those items were added.
Which begs the question, “To what degree?” Two-percent? Ten-percent? How much did the Democratic Party’s proposals get watered down?
At the insistence of House Republicans, who threatened to sidetrack negotiations at midweek, the insurance provision was added as an alternative to having the government buy distressed securities…
But the Treasury Department has said the insurance provision would not pump enough money into the financial sector to make credit sufficiently available.
And since that’s the case, there is no point in the insurance provision, is there?
Despite the changes made during an intense week of negotiations, the heart of the program remains Bush’s original idea: To have the government spend billions of dollars to buy mortgage-backed securities whose value has plummeted…
“We’re very pleased with the progress made tonight,” said White House spokesman Tony Fratto…
The Bush Junta’s White House is “very pleased.” If that doesn’t have your mental alarm bells ringing, how about this next part?
It was not immediately clear how many House Republicans might vote for the measure. With the election five weeks away, Democrats have said they would not push a plan that appeared sharply partisan in nature.
And THAT is the bloody problem, isn’t it? The plan SHOULD be partisan, and the partisan angle should be steeply leftward. Instead, the Democratic Party has embraced Obama’s idiotic centrist stance — and the only way to stay in the center is to STAY. IN. THE. CENTER.
Can’t make much leftward progress if you refuse to move left, can you?
(Link via Talk Left)
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