The Referenced Bail Out Proposal: A Case Study

1623 Words7 Pages
The commonly referenced Bail out proposal is in effect an emergency economic stabilization act aimed towards purchasing distressed assets ( most of which being mortgage back securities) and to help make monetary injections into various highly inlfuencial US banks. The banks in question are by and large mostly U.S. or foreign banks who's intricate investment into the US economy was deemed crucial enough to warrant the relief. The original proposal was three pages, the purpose of the plan was to purchase bad assets, reduce uncertainty regarding the worth of the remaining assets, and restore confidence in the credit markets. The first draft amendment was rejected through a vote of the House of Representatives on September 29, 2008, by a margin of 228-205, with this defeat government…show more content…
The question we all as taxpayers should be asking is whether or not we will see a good return on our investment. The Democratic proposal is a bit more negotiable since the taxpayers would at least own an equity interest in these companies. However, even that modified plan seems too expensive and way too intrusive. We should consider alternative plans that are not quite as intrusive to market mechanisms such as the Lindt plan. The Paulson plan also seems to signal a dangerous shift away from liberal market mechanisms into an age of neo-mercantilism. This should concern both American conservatives (destruction of Smith's Liberalism) and American liberals (since the system naturally favors certainly wealthy interests at the expense of largely lower and middle income taxpayers). .Certaintly we should agree that a government that takes our taxpayer monies and distributes it out to already-wealthy individuals who have shown a reckless disregard for managing that money in the past does not provide us with much of an efficient return on our own
Open Document