The Treasury Secretary may soon request the second $350 billion of the original $700 billion financial bailout fund Congress created last year. Following President Bush's decision to use $17.4 billion from that fund to prop up General Motors and Chrysler, the first half has now been spent. Once it's requested, Congress will have 15 days to vote on a resolution of disapproval. it would take a two-thirds majority of each chamber to deny the administration the money.
I voted against the original financial bailout. I take no joy in knowing that my concern about whether it would address the underlying problems--plummeting home values and frozen credit markets--has been realized. Most of the $350 billion in taxpayer money was used for capital infusions to banks. But this did not have an impact on creating more liquidity in the credit markets. Small businesses still face obstacles to obtaining credit and home values nationally fell 13 percent in November.
Our economy has been in a recession for a year. Unemployment is approaching 7 percent nationally. Utah's strong economy isn't immune: Washington County, for example, saw its unemployment rate jump to 5.3 percent--an increase of 2.2 percentage points from the year earlier. Last year was a historically bad year for the stock market. I think it's time to focus on solutions, including transforming the bailout of the banks into stabilizing housing prices and halting the growing foreclosure rate.
There, he said it: "solutions"! But aren't they really just "wishes," as in, I wish the housing prices would stabilize, and I wish there would be fewer foreclosures. How does that happen without the banks, Jim?
It's easy to vote against a bailout—which you did and are considering doing again—but what do you propose in its place? Seriously, Congressman, what are your solutions?
The newsletter goes on to ask readers to fill out a survey:
Do you think that the $350 billion already spent by the Treasury Department has had a positive impact on our economy?Has it really come to this? With all the expert financial thinkers and resources at your disposal, you want your constituents (at least the ones who signed up for your newsletter), in a two-question survey, to tell you how to solve a worldwide economic meltdown? Personally, I think consulting the Magic 8-Ball would be a better move. (Jerre Wroble)
Would you support the release of the second half of the $700 billion in taxpayer funds if Congress directed that some of it be used to help homeowners, rather than banks?