Fixing The Economy

Report:

It then resumed in the summer with Fannie Mae – the Federal National Mortgage Association – and Freddie Mac – the Federal Home Loan Mortgage Corporation – crying wolf. These financial institutions began flying under the wing of the government in July when the Treasury Dept. orchestrated a rescue plan on their behalf. Though Freddie and Fannie had not yet failed, their stock had dropped between 70 and 80 percent by the time the government was poised to intervene.
As much as they disliked the government meddling in private finance, none were reluctant to allow the government to fork over the money required to keep these firms afloat, essentially giving the government carte blanche to seize control of the companies and turn them into dreaded Government Sponsored Enterprises (GSE’s).
The government decided against a bailout and, scared that a Lehman Bros. failure would create a shockwave effect in the mortgage-backed securities market, Merrill Lynch quickly agreed to a buyout by Bank of America.
Mr. Paulson thinks the average American Joe shouldn’t think of their tax dollars, which will serve as capital to for the government to buy stocks, as an investment. The Senate version of the plan gives tax breaks to businesses that produce, use, research or develop alternative energies and provides higher government insurance for bank deposits. Weather you like it or not, the bailout plan is necessary.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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