TITLE I - Authorizing the Treasury Department to Buy Mortgage-Related Assets
Sec. 6. Maximum Amount of Authorized Purchases. (6 Comments)
The Secretarys authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time
6 comments on Sec. 6. Maximum Amount of Authorized Purchases.
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This is a Line of Credit for $700 billion. The total outlay from the American taxpayer could be trillions over time.
posted by anonymous at September 22, 2008 -
6. Rename this Section: The Sky's the Limit, no Maximum to be Set for Authorized Purchases
posted by Anne at September 23, 2008
Suggestion: Cap it or Scrap it. Provide an absolute limiting value for the program, that can be raised by Congress if the program seems to be working. And that cap value should be $100B max to start with, not $700B.
Actually, this whole document needs to be scrapped. But if someone doesn't so say and mark up its most egregious contents, it might actually carry some undeserved weight in the final legislation. IMO the Treasury should not be writing self-serving bills on faux-crisis timeline like the one Sec Paulson tried to float over the weekend, giving Treas unlimited money and unlimited power, without oversight or consequences for screwing up things worse than they already are. Here's a novel approach: come to the peoples' representatives with the problem in a timely manner and let our representatives craft the solution. I call this concept "representative democracy" and was under the impression it was a foundation of our govt. -
As has been pointed out by the other comments, this is not actually a $700 billion cap to the program's cost. Look at that "at any one time." When you combine that with the authority this plan gives to the Treasury to compel firms to sell and buy assets through the program, it actually constitutes an unlimited line through which Treasury can hand money over to companies.
posted by Ethan C. (private citizen) at September 23, 2008
If they really wanted to be cheeky about it (and with no oversight, why not?), they could inject cash directly into a company by buying their assets at "market value" (i.e. whatever Treasury decides it wants to pay for them), then selling them right back to the same company for a reduced price. That would take the assets right back off the government's books. They wouldn't have to be part of the $700 billion pile for more than, say, a few hours.
It seems like the $700 billion number is, more than anything, a nice round number that the media and congress can use to pretend that the program has a maximum cost. -
How about: "The Secretarys authority to purchase mortgage-related assets under this Act shall be limited to $200,000,000,000 in total"
posted by John Abbe at September 23, 2008 -
Cap should be $0. If not $0, then limit to 1st mortgage under $200,000 and not having a 2nd mortgage/line of credit. Those over $200,000 &/or 2nd mortgages made their debt in an effort to "get something for nothing" so they need to resolve their own issues related to greed. Also, a $200,000 limit will send more of the taxpayer funds back to the emotional as well as the geographic Heartland of America Taxpayers and not just cover a few of the California, NY, Washington D.C. & other equally "high rent" areas.
posted by Midwestern at September 26, 2008 -
So the Fed wants a revolving line of credit....kiss my a** !!
posted by brass monkey at September 27, 2008
The Fed loaned banks last week $188 billion per day just to keep a pulse on a corrupt system that the American people have stupidly allowed to continue.
Do the math $188 mil x 5 = $940 billion
If they can do that, why do they need us ?
And how much has Congress allowed to be spent in Iraq / Afghanistan / and we must not forget on Israel !! Screw them all !!