Okay, so I made the last part up.
But Treasury Secretary Henry Paulson’s series of statements today regarding the latest proposal sounded like those spam emails in my inbox promising everything from riches to more energy. And just like those “too good to be true” messages, Paulson’s messages were a little too over the top to be believed.
Paulson didn’t offer a lot of specifics during his press conference today but made enough noise that the gist is there. I expect that he will turn over a package to Congress that will offer to buy massive amounts of debt from sinking banks. If all goes according to plan, if the housing market recovers, if the government gets a big enough discount, if the government can find a willing buyer when this is all said and done, then the government could make a profit. That’s a lot of ifs.
How much will this deal cost? Senator Richard Shelby (R-AL) who is the ranking member on the Senate Banking Committee has tossed around a figure of $500 billion. If that turns out to be true, that will bring the total bailout to date to $1.3 trillion (considering $800 million already earmarked).
Paulson, however, is quick not to characterize this as a net expense to taxpayers because if all goes well (there’s that if word again), the government will get what is being referred to as “saleable and income-producing assets.”
Hmm… Buy low even if you can’t afford it. We swear you’ll make a profit later. It’s a great investment!
Isn’t that thinking how we got into this mess to begin with?
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