The plan contains three sections that are particularly concerning to me, an average Joe, who does not spend more money than I have available and is held accountable for my actions. See Sections 6, 7 & 8 below:
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.
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.
Wow! Authority to spend up to $700 billion at a time. Now that's a pretty nice credit limit on Daddy's credit card! Hey if the spending spree turns out to have been a bad decision after a night of too much bourbon, no worries, a get out of jail free clause has been written into the bill covering any fraud, ineptness, or just plain bad decisions not even being eligible for legal review.
I have already written about my suspicions of Secretary Paulson's motives on Bob's Blog. See http://bob4bristol.blogspot.com/2008/07/ron-paul-asking-right-questions.html . I don't see Secretary Paulson, former CEO of Goldman Sachs, as being forthright with his statements to the American people. I do not believe that he has the collective interests of most Americans in mind based on the corporate bailouts packages he has devised to save his reckless financial friends at the expense of the American taxpayers.
The REAL SOLUTION contains the following:
- Tightened regulatory oversight of sketchy lending practices and "exotic" loan products.
- Prosecution of the players that fraudulently abused the system.
- Hold homeowners that took out the loans accountable by making them own up to their financial responsibilities. For homeowners with interest-only loans, negative equity positions, and artificially-low ARMs that are readjusting, deals could be worked out that phase in a graduated increase in interest rates to a fixed, market-rate mortgage with a 30 or 40 year duration. This loan could contain pre-payment incentives to help reduce long term interest-rate exposure to lending institutions.
Washington are you listening?
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