WASHINGTON - The Bush administration is asking Congress to let the government buy $700 billion in bad mortgages as part of the largest financial bailout since the Great Depression.

The plan would give the government broad power to buy the bad debt of any U.S. financial institutions for the next two years. It also would raise the statutory limit on the national debt from $10.6 trillion to $11.3 trillion — making room for the massive rescue.

A draft of the proposal obtained Saturday by The Associated Press does not specify what the government would get in return from financial companies for the federal help.
Treasury Secretary Paulson and his team planned to continue discussions with lawmakers through the weekend. Bush was monitoring Paulson's discussions, but had no meeting scheduled with his Treasury chief as of Saturday morning.

Congressional aides awaited a briefing Saturday from Treasury officials.

The proposal would amount to most sweeping federal intervention to rescue failing financial institutions since the Great Depression. Congressional leaders hoped the developing legislation could pass as early as next week.

The administration is asking Congress for far-reaching new powers to take over troubled mortgages from banks and other companies, including purchasing sour mortgage-backed securities.

"The risk of not acting would be far higher," Bush said Friday.

Democrats are insisting the rescue include mortgage help to let struggling homeowners avoid foreclosures.

They also are also considering attaching additional middle-class assistance to the legislation despite a request from Bush to avoid adding controversial items that could delay action. An expansion of jobless benefits was one possibility.

In a briefing to lawmakers, Paulson and Federal Reserve Chairman Ben Bernanke painted a grave picture of an economy on the edge of a major recession and telling them that action was urgent and imperative.

Bush seeks $700 billion for bailout - Stocks & economy - MSNBC.com

Do you think the Bush Administration would be eager to bail me out? I need some help with student loans. Taxpayers foot the bill, surely the AWE community can fill my pain.

Jut another example of when big business hold out their hands it's ok. When an average Joe looks for a "Hand Up" it's like.......Get a job, Cowboy up. Pull up your boot straps you ole geezer. I mean where were they when the housing crisis started? When Thousand upon Thousands of Americans were loosing their homes, they turned and eye to it. This isn't about protecting Americans it's about protecting the Elite.

Also, just an observation, wouldn't be a lot easier for the establishment to shove The North American Union, NAFTA SuperHighway and the Amerio down the throats of Americans when the very fabric of our economic way of life is destroyed? Do you think this all just happened by mistake or just a part of a big ole master plan.

__________________
"I hope our wisdom will grow with our power, and teach us, that the less we use our power the greater it will be." Thomas Jefferson

"The conservative movement has been hijacked and turned into a globalist, interventionist, open borders ideology, which is not the conservative movement I grew up with." Pat Buchanan

"The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government"
Thomas Jefferson

Moreover,

You can follow this whole mess right back to the doors of THE FED. When you mess with Business Cycles this is what you get. By using a band aid approach, it's just going to get worse. We must as a Nation fix the fundamental problems of our economy, philosphy not treat the symptom.

More bailouts............The few Benefit @ the cost of the Masses.

They've completed their aim of destroying our Republic. Ruin the Currency, the rest will fall in line.

"The issue of economics is not something I've understood as well as I should. I've got Greenspan's book." --as quoted in the Boston Globe, Dec. 17, 2007

Oh by the way;

"The fundamentals of our economy are ok" John McCain

The Federal Reserve is the problem for sure! While everyone dwells on the election... mortgage crisis etc. the fed is using smoke and mirrors to execute their master plan for global dominance. Too bad our children won't be able to enjoy the country as we have.

It will be a lot more than that. I expect this to cost at least a trillion and a half and that won't include a lot of little expenses they won't bother to report on the deal.

Even at 700 billion, if you want to save the the US economy give the 305 million US citizens 1 billion each and no more worries about what your 401 k is doing.

Can you actually make a reasoned argument to support this statement, or are you like McCain, rounding up the usual suspects for execution?

I can imagine a way for the Fed to have prevented the current crisis, but that would be in violation of one of its primary mandates, a mandate that Milton Friedman and other monetarist claim should be the absolute priority for the Fed, price stability.

Do you believe that wages and prices in the US should have been forced down by 2-5% a year for the past quarter century, contrary to the Congressional mandate to maintain price stability? That is what would have been required to drive up the prices of imports to cut off imports and thus starve the rest of the world of cash to invest in the US.

Are you saying that apparent loss in market value of all the houses plus the actual dollar losses will be a trillion and a half, or that the losses on the mortgages foreclosed alone will be a trillion and a half, or that the way the bonds are disposed of will result in the taxpayers taking a trillion and a half hit which is translated into a trillion dollar profit by those who buy the bonds and hold them until they mature with only moderate actual losses and some significant workout costs?

The problem with the claims about losses in cases like this has to do with the definition of "value." In the past few weeks we have a good example of the problem, when a five year old news report was mistakenly listed as breaking news and people reacted to the news of that old bankruptcy by selling the stock at high enough rates to drive the price of the stock down by 90%. I have no idea what the true value of the stock was before hand, but clearly 10% of that value was also incorrect. So, to say that the losses to stockholders that day was 90% of the value of all the stock held is false. Likewise, when the following day the price increased by a factor of 7 or 8, one can't really say that the value of the company increased by 800%.

One might talk of the money lost by speculators who were reacting to information without context and thus without basis in fact. Those who didn't act on the information lost nothing. The airline lost nothing beyond the PR time and cost of responding to the information, which while it might be a fairly high expense for an individual, or even a corporation, is small in relation to the airline's operating expenses.

The dot.com bubble bursting it claimed to have resulted in a loss of $5 trillion, but to make that claim, you must also say that in the prior few months the stockholders gained $5 trillion, and in both cases there was no underlying change in the value of the corporations that the stocks provided a stake in. We would be better to say that in a span of months, people gained $5 trillion in unjustified wealth, which they justifiably lost in a few months. The only ones who gained and lost money were smart and stupid speculators, which proves that speculators are not as useful as claimed in making free markets work better to establish the true value of things traded in the market.

We have clearly had a decade of lots of trading based on information that was as grounded in reality as the news story posted as breaking news five years after the fact. Kevin Phillips argues that this has been the case going back at least a quarter century.

As hindsight is sometimes more perfect than looking to the front, side, up, and down, I put the decision point for the US at July 15th, 1979. Reagan put to the American people the vision of easy living based on redirecting our focus from society to our personal lives, arguing that by focusing on our own personal satisfaction and not some wider national, global, or societal satisfaction, we will more fully increase all. That if everyone seeks to maximize their own satisfaction in the present, each individual will be better off, and thus everyone will be better off.

Again, that is an information problem. The implicit assumption of Reagan is that the information about our personal situation is an accurate reflection of the reality for all. And then a major focus is placed on defining the information that is used to measure personal satisfaction, and this then determine what needs to be done to improve our own satisfaction that in turn dictates that the satisfaction of society is dictated by that action.

I seems to me that we have a fairly solid block of society from 1980 to 2005 that focused on a few bits of information which glued them together. One was that they feel more satisfied knowing that their taxes have been cut, because they have been told their taxes have been cut. It isn't clear that many people actually spent much time determining if their taxes really had been cut. Others probably figured that while some people claimed they were better off from tax cuts, without having the data, they wouldn't quite admit that they weren't, but they would call for more tax cuts so that the benefits of tax cuts are increased. And maybe one specific tax was reduced enough to matter, but as a consequence, five other taxes were increased, the latter wasn't connected to the first, nor was the perhaps greater inefficiency of the new taxes wasn't measured.

And clearly the one thing that clearly isn't noted is the tax increases that will be paid by future generations either in actual taxes or in inflation or poorer natural and built capital.

So, the matter of value and cost are tricky. If $1000 in tax cuts per person this year translate into $2000 in tax increases for your grand children in 50 years, (discounted to present value) how much value does that tax cut really have? It actually can make sense if that $1000 is invested in ways that produces in 50 years added revenue of $2000 in 50 years, a break even case, or $5000 in 50 years, a very good investment.

Carter was in a sense expressing the confidence, that might not be justified, that a $1000 tax increase today would produce a $5000 increase in income in 50 years. Reagan was suggesting that a $1000 tax cut today is a $1000 more for you today and that is sufficient justification for the $1000 tax cut today.

Both arguments can be questioned. It is clear that Reagan and those who followed him were unwilling to question their argument.

And so, slowly but surely the debt has risen and risen, little by little, the drip drip drip into the closed tank were we lazily float on a raft in comfort. We are seeing some fall off their rafts and because the top of the tank is too close, they can't get back on. Those lucky enough or with the foresight to get in the very middle of the raft are saying, "hey, its their fault the fell off the raft, let them drown if they can't claw themselves back on the raft" ignoring what is logically ahead for them.

I don't quote politicians, the Fed has no interest in preventing or fixing anything . Your right.. it is a violation and that has not stopped them. search the Fed reserve on You Tube or Google it.

I can't figure out your point. Are you saying the Fed acted correcting in roughly maintaining wage and price stability of the past quarter century as Milton Friedman advocated, and believes the Fed did reasonably successfully?

Or are you saying the Fed should have violated that principle and instead acted to balance international trade and prevent US imports of goods from exceeding the value of goods exported by the US, which is the policy mandate of Treasury, and not the mandate of the Fed?

In that regard, Treasury has failed, but they have no instument available to them, other than influencing the trade treaties the president strikes to ensure the president can impose trade quotas and tariffs?

Do you believe that trade should be governed by quotas and tariffs to ensure that US trade is balanced, and thus prevent the rise the US financial system?