I oppose the bailout. The Cheney/Bush Administration from the start created an atmosphere of unbridled greed through prosecution of the Iraq war for oil profits, some of which will wind up in Cheney and Bush's pockets, even 15 years from now. This atmosphere gave the green light to all industries and institutions to follow suit, including the financial industry. Add to that deregulation, and we have what we have today. De-regulation in itself did not create this situation. Abuse of de-regulation through greedy practices did. And this abuse and greed are directly attributable to the Cheney/Bush administration. Besides, Americans need to end their addiction to credit!

Sent by Richard Abrahams | 4:56 PM ET | 09-29-2008

If the economy needs a bail out; let's deliver it via the tax payers rather than the banks. Let's inject liquidity using something similar to the economic incentive package by using "Stimulus Payments" of about $5,000 per tax payer. This number is calculated by dividing the proposed $700 Billion by the approximate number of U.S. Taxpayers of 138 Million yielding $5072 per tax payer. (Of course this number would be a little higher if we left out the million or more mortgage holders that are, or soon will be, in default on their loans; after all, they and corrupt financial industry representatives are responsible for this problem.) The recent "Stimulus Payments" of $600 proved to have some beneficial effects; perhaps giving $5000 to each tax payer would yield a very dramatic effect.

Now it is clear that not all of the money would be put into the banking system, but much would. Many of us are more than a little concerned about our individual financial futures and we will put the entire amount into savings. This would represent an injection of liquidity into the banking system.

Some of us would like to reduce the burden of our home mortgages and/or other debt and use the money to pay down these loans. This would also have the effect for injecting liquidity in that it would free up dollars in the financial system.

And still others would simply spend the money doing what Americans do best, consuming as usual. This will have the effect that was desired for the current $600 "Stimulus Payments".

My personal feelings are that this situation was caused by greedy financial companies, et al., providing loans to people who probably knew they were getting in over their heads but were gambling that they could pull it off and now they find themselves facing the cold hard truth that they gambled too much and lost. You could argue that the root cause was deregulation; and perhaps you'd be correct. But, it was unethical and/or risk-taking individuals who abused the lack of regulation, and they should be the ones paying the price. That is why I believe it would be better to provide liquidity via tax payers--responsible tax payers--and leave the banks and their high-risk debtors to work things out without direct Government (tax payer) help.

Sent by Ben Shepard | 5:16 PM ET | 09-29-2008

I was wondering if Bush and company might try to engineer an actual financial crisis by manipulating the stock market in order to vindicate their position. I also posit the question that if this should happen, are there any safeguards in place to prevent such a Machavelian maneuver to occur. I also would like to know, that given such underhanded tactics might happen, would it be somewhat easy to find out that it did happen and to nail the conspirators?

Sent by Jim Clayton | 5:55 PM ET | 09-29-2008

Financial meltdown = we're broke

America needs MONEY

America needs MANUFACTURING to make money. Money comes from industrial and agricultural productivity. Manufacturing built America.

We must again support American manufacturing so American factories can create jobs and money to solve our financial crisis

BUY PRODUCTS MADE IN USA. SUPPORT OUR ECONOMY--NOT CHINA'S. AMERICA NEEDS YOU.

Tell everyone you know about the YouTube video "Dollar to the Giant":

http://www.youtube.com/watch?v=TUj8leZxmK8

It could solve our economic crisis.

Sent by Alan Bond | 6:03 PM ET | 09-29-2008

I'm a high school economics teacher and investor. I just don't understand why this meltdown is a surprise to anyone. Since 1985 our National Savings Rate (according to the Fed) dropped from an average of about 10% to 0. Actually in 2005 we were buying so much on credit we went NEGATIVE! Meanwhile our consumer debt has grown from half a trillion dollars to over $2.5 trillion. That is a personal debt of little over 18% of the US GDP (2007). Furthermore, US public debt reached $5 trillion, nearly 37% of the US GDP (2007), and total national debt reached $9 trillion or over 65% of the US GDP (2007). What a perfect trifecta: the government owes $9 trillion, consumers owe over $2.5 trillion, and consumers have been saving (on average) less than 3% since 1999... The total per capita debt is over $38,000 while the per capita income was nearly $27,000 (US Census 2007)... I realize I'm just a high school econ teacher but I don't think it takes much to understand that this consumer debt had to come crashing down on us.

Sent by Juan | 7:11 PM ET | 09-29-2008

NPR Should re-air the shows from 2004 when your liberal commentators were disparaging the regulators who wanted to reign in freddie and fanny.

Sent by Lib Hypoc | 8:20 PM ET | 09-29-2008

Two points;

First, in line with the 'trickle-up' demands of Main Street America, here is an easier solution; $700B divided by 31 Million households with mortgages equals $2258 per household. Why not apply that amount to every single mortgage? That would give homeowners in trouble time to work out a permanent solution, it is equitable for all, and it would give Wall Street and the financial institutions the needed capital boost to remain liquid. Sounds like a simple solution to me...

Secondly, Robert Heinlein, in one of his 'future history' novels circa 1970, that "In 2004 the Evangelicals would win the Presidency, in 2008 they would steal the Presidency, and in 2012 the election would not take place at all." Perhaps he was only off by four years. The Bush Administration is responsible for this mess, and now Bush himself has declared this a 'crisis' and he was the first one to cite the "P" word, Panic. Perhaps this is all an evil ploy by the Great Deciever to creat a crisis, suggest a solution that he knows nobody will buy into (the Bush/Paulsen Plan) and then when it inevitably fails, Bush can declare Martial Law and suspend the upcoming election in the interest of National Security. The "Evil One" then becomes Dictator for Life, and his appointed cronies (Chaney, Paulsen and Bernenke) become the next three most powerful men in the world, with seven hundred billion of US Taxpayers dollars to do with as they please.

This is scarey, people. Can it be that the timing of this 'crisis of confidence' is all coincidental?

Sent by Ric Moreau | 8:59 PM ET | 09-29-2008

The people of this country reject the Bailout because it is buying junk mortgages at way above current market price, giving a free hand to Paulson, whose risk-friendly oversight led to this crisis. Will this be the final blow to the nation delivered by Bush and expedited by the Democrats?

Please urge the Banking & Finance Committee members & your representatives to consider these truly viable alternatives:

SWEDEN: Banks had to write down losses and issue warrants to the government. That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well.
See NYT 9/22 Carter Dougherty

Thom Hartmann: How to bail out Wall St. without costing the taxpayers a dime. Federal government would create a new agency to manage the process. The treasury would then loan money to firms in trouble. The Federal government would institute a Securities Turnover Excise Tax of 0.25% on stock trades (not a significant cost to investors) with revenues going to the new agency. This tax would raise estimated $150 billion a year, so the $700 billion load would be paid off in 5 years. The US has had such a tax, used to finance the Civil War, Spanish-American War, WWI, WWII. Many other countries have a similar tax.

Senator Bernie Sanders (I-Vermont) /www.sanders.senate.gov/news
First, impose a five-year, 10% surtax on the income of individuals above $500,000 a year, and $1 million a year for couples; a requirement that the price the government pays for any mortgage assets are discounted appropriately so that government can recover the amount it paid for them; and, finally, the government should receive equity in the companies it bails out so that when the stock of these companies rises after the bailout, taxpayers also have the opportunity to share in the resulting windfall. Taken together, these measures would provide the best guarantee that at the end of five years, the government will have gotten back the money it put out.
Second, in addition to protecting the average American from being saddled with the cost, any serious proposal has to include reforms so that we end the type of behavior that led to this crisis in the first place. Much of this activity can be traced to specific legislation that broke down regulatory safety walls in the financial sector and allowed banks and others to engage in new types of risky transactions that are at the heart of this crisis. That deregulation needs to be repealed. Wall Street has shown it cannot be trusted to police itself. We need to reinstate a strong regulatory system that protects our economy.
Third, we need to address the needs of working families in this country who are today facing very difficult times. If we can bail out Wall Street, we need to respond with equal vigor to their plight. That means, for example, creating millions of jobs through major investments in rebuilding our crumbling infrastructure and creating a new renewable energy system. We must also make certain that the most vulnerable Americans don't freeze in the winter or die because they lack access to primary health care.
Fourth, we need to protect ourselves from being at the mercy of giant companies that are "too big to fail," that is, companies who are so large that their failure would cause systemic harm to the economy. We need to assess which companies fall into this category and insist they are broken up. Otherwise, the American taxpayer will continue to be on the financial hook for the risky behavior, the mismanagement, and even the illegal conduct of these companies' executives.

Michael Hudson See CounterPunch 9/22
First, the Treasury only should buy junk mortgages at current market price. The losses should be taken in order to re-even out the wealth pyramid that has become so much steeper under the Greenspan-Bernanke ploys. The banks knew full well that these mortgages lacked underlying value. The price of making use of this borrowing facility is to forfeit all equity stock to the government. The Treasury should prohibit any financial institution that sells or swaps securities to the Fed from paying any dividends to shareholders or stock options and bonuses to managers. It also should give the government priority over other creditors. Otherwise, firms that have negative equity will benefit purely at public expense, using the money to pay dividends, bonuses and exorbitant salaries.
Second, we need to restore the Glass-Steagall separation of commercial banks from risk-taking investment banks, mortgage brokers and other financial-sector flotsam and jetsam. Break up the mergers between banks and casino sell-side financial and real estate institutions. Just the opposite is occurring: On Monday, Sept. 22, the financial universe was transformed by the announcement that Mr. Paulson's Wall Street firm, Goldman Sachs, was transforming itself into a bank holding company. The casinos are to take over the banking system as big fish eat little fish in the present financial emergency. It looks like new giants are emerging, already larger than the government in terms of the magnitude of the debts they have run up -- and certainly in their earning power. Indeed, who is to say that extracting interest from the U.S. economy will not emerge as the new form of taxation?
Third, re-write the bankruptcy laws to favor debtors once again, not creditors. This means reversing the current bankruptcy code sponsored by lobbies from the credit-card companies. The interests of the five million mortgage debtors faced with foreclosure and expropriation this year should rightly be placed above the interest (literally) of predatory creditors.
Fourth, sharply increase property taxes, shifting them back off labor and sales. We need to return to the classical idea of taxing unearned and unproductive income instead of adding to the price of labor and industry. What has been freed from the tax collector by the shift of taxes off property has not lowered the cost of housing and other real estate, or corporate costs of doing business. The income "freed" has ended up being paid to the banks as interest. The government still has had to raise money -- but in the form of taxes that fall on labor's wages and industry's profits. So labor and industry now pay twice for what they formerly paid only once. They still pay the same overall amount of taxes, but also pay an equivalent amount of interest. The financial system is crowding out the government.
Fifth, what if all banks were to be organized along the lines of savings banks, with 100% reserves. This is the Chicago Plan from the 1930s, currently revived by the American Monetary Institute, which holds its annual meeting this week in Chicago. This at least would go back to basics to provide a foundation from which to re-begin to discuss just what kind of credit the economy needs and what would be the best terms on which to structure financial markets. (In recent decades banks have made loans mainly to inflate asset prices by loading real estate and industry with interest-bearing debt.)

Sent by Joanne Sunshower | 10:17 PM ET | 09-29-2008

Hi,

I received this email from a friend and haven't done the math plus I have no way of knowing if the facts are right but this is a pretty interesting alternative to the bailout for the financial sector but if this is correct it could be a much better solution at a fraction of the cost.

George

I'm against the $85,000,000,000.00 bailout of AIG. Instead, I'm in favor of giving $85,000,000,000 to America in a "We Deserve It Dividend."To make the math simple, let's assume there are 200,000,000 bona fide U.S. Citizens 18+. Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up.. So divide 200 million adults 18+ into $85 billion that equals $425,000.00. My plan is to give $425,000 to every person 18 and up as a "We Deserve It Dividend." Of course, it would NOT be tax free. So let's assume a tax rate of 30%. Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam. But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife have $595,000.00. What would you do with $297,500.00 to $595,000.00 in your family? Pay off your mortgage - housing crisis solved. Repay college loans - what a great boost to new grads Put away money for college - it'll be there Save in a bank - create money to loan to entrepreneurs. Buy a new car - create jobs Invest in the market. - Capital drives growth Pay for your parent's medical insurance - health care improves. Enable Deadbeat Dads to come clean - or else. Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back, and of course, for those serving in our Armed Forces.

If we're going to re-distribute wealth let's really do it...instead of trickling out a puny $1000.00 ( "vote buy" ) economic incentive that is being proposed by one of our candidates for President. If we're going to do an $85 billion bailout, let's bail out every adult U S Citizen 18+!

As for AIG - liquidate it. Sell off its parts. Let American General go back to being American General. Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up. Here's my rationale. We deserve it and AIG doesn't. Sure it's a crazy idea that can "never work." But can you imagine the Coast-To-Coast Block Party! How do you spell Economic Boom? I trust my fellow adult Americans to know how to use the $85 Billion We Deserve the Dividend more than do the geniuses at AIG or in Washington DC And remember, The Birk plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh...I feel so much better getting that off my chest.

Kindest personal regards,

T. J . Birkenmeier, A Creative Guy & Citizen of the Republic

Sent by George | 12:22 AM ET | 09-30-2008

Funny how Bush/Cheney are always to blame. I agree that Americans need to curb their spending and adjust it to what they can actually afford. I am interested to know what your thoughts are on Franklin Reines, the fact that Obama had the 2nd highest in donations from FNMA in the last 10 years even though he only received funds the last 3? I am tired of the politics on both sides, but idealism and following the party line aren't going to get the U.S. out of the crap we are in now. I guess greed also doesn't cross ove the party line to the Democrats?

Sent by Chris | 12:33 AM ET | 09-30-2008

I'm disgusted! The problem started years ago and now the Three Kings, Secretary of the Treasury, SEC Chairman, and Chairman of the Federal Reserve, have the audacity to take some action? How about we take some action and fire all three for sleeping behind the wheel of a burning car. It will problaly do more good for the economy than that junk proposal they are trying to stuff down our throats!

Speaking of the initial proposal, one with a real education does not write a $700B bailout for Wall Street on three little pages. My home insurance alone is 16 pages long and my car insurance is 4 pages long. What is wrong with this picture? And I'm a middle class citizen, well, until they pass the bailout proposal then I'll be poor!

Sent by Josh | 12:39 AM ET | 09-30-2008

There are eerie parallels here to the build-up to the Iraq war: top-government officials who scare the Congress into action without time to reflect and with dubious information. And the top government officials in question by dubbing this a panic helped to create a panic (not a smart move in trying to alter an economy predicated in part on fear). I am particularly surprised by the "Shock and Awe" assumptions and rhetoric that have seeped into media coverage, including comment on the Lehr program, NPR, and Charlie Rose. These faulty assumptions have cropped up repeatedly: 1) The Govt must act imminently, 2) it is vital to convince Main street that this IS about their interests, and 3) We cannot consider alternatives to the first plan proposed. Reporters and observers who observed these assumptions were surprised by today's vote. It was no surprise if you put aside these assumptions to listen to the Republican dissenters state emphatically on Friday that they disagreed fundamentally with the plan.
While I agree with Republicans who voted against the bill, I couldn't disagree more with their plan for a massive tax break for Wall street (which they have misleadingly pitched as taking the burden off Main Street). What is most unusual about this crisis is that the citizen-taxpayers have spontaneously generated a grassroots movement which have upended the claim of either Obama or McCain to spearhead change.

Sent by Martha Reis | 3:23 AM ET | 09-30-2008

I oppose the bail out. The vote in Congress was a win for the American People, not a loss. The News Hour for the first time showed a bias by stessing this vote as a loss--it was a win. Congress did what the people want and voted no. Good for Congress--its about time they became fiscally responsible! The proposal is a bail out of folks who overspent their budget, made foolish loans, and refused to save for a "rainy day" --all grasshoppers and no ants. I am happy the stock market plunged, because stocks of good companies are now on sale and return dividends over 5%. For folks who played the ponzi scheme on houses, I have no sympathy: they took the thrill now they get the bill, not the taxpayers. Instead, if there is a serious recession Congress can fund temporary public service jobs so folks can work and pay their mortgages--and add value to our infrastructure for the money they are paid. I call this "trickle up" economics. For investors, there should be no bail out. Insurance of CDs and money market funds is sufficient to protect investors. I hope Congress continues to vote no.

Sent by Gerald Rogan, MD | 3:56 AM ET | 09-30-2008

There are several concerns here.

1] What is missing from most of the capitol hill discussions regarding, seems to be the concept of accountability. Why can't bankers play by the same rules as the rest of us?

2] 700 billion dollars is an arbitrary number, 'invented' before most of the 'crisis' had even unfolded. How reliable is this number?

3] The bigger problem is that many American citizens cannot afford to keep their homes. Why not target the problem, rather than the symptoms underlying the 'crisis'?

Sent by Marshall McCue | 4:52 AM ET | 09-30-2008

I agree.

Sent by joe | 7:52 AM ET | 09-30-2008