The proposed federal bailout plan which is scheduled for a vote in the House of Representatives today, Monday, September 29, 2008, is nothing more than a $700 billion expense to taxpayers, with limited congressional oversight and no hard provisions to limit executive enrichment or protect either homeowners or taxpayers.
In the bill, known as the Emergency Economic Stabilization Act of 2008, and available at publicmarkup.org here. enables the Secretary of the Treasury (currently, but hopefully for not much longer, Henry Paulson) to purchase a broad swatch of assets from virtually any type of American business.
The limits on spending (to buy bad debts and other assets) are initially $250 billion, but the mechanism for the Treasury Secretary to increase the spending amount up to and beyond $700 billion is quite easily facilitated.
The House of Representatives is scheduled to vote on the measure shortly after noon Eastern time, though passage is far from certain. Public opposition has been nearly universal. Rank-and-file Republicans and Democrats are seen to be the major opposition to the bill, which is being supported by the President and the Democratic party leadership. Both House and Senate Republicans are largely divided on the issue.
Wall Street is providing few clues as to whether passage of the bill is necessary or wanted. The Dow is down 277.26, with the NASDAQ off 84.61 with a little more than an hour before the critical House vote.
If the measure succeeds, there is no guarantee that all of this spending will change anything in either the short or long term.
It is the position of this writer that the American public would be best served by the congress voting down this horrible piece of legislation, recessing and doing nothing. If the stock market is going to crash and the credit markets completely freeze up, then Wall Street and investors will receive exactly what they deserve. The plan proposed by the administration and changed only cosmetically by congress won't change much, if anything.
Additional information will be posted as events warrant.