Paulson Warns Of "Fragile" Economy

Treasury Secretary Talks To Scott Pelley About The Controversial $700 Billion Bailout

(CBS)  Stiglitz agrees a bailout is necessary, but he doesn't like Paulson's plan, which would have the American taxpayer buying bad debt now held by banks. "His proposal is to take on to American taxpayers the millions of bad mortgages, toxic mortgages that no one in Wall Street wants to take. When they announced that plan, the champagne bottle corks were popping on Wall Street. They finally found the sucker to take off these bad assets. No one in the private sector would touch these toxic mortgages," he explained.

Stiglitz says the "sucker" is the American taxpayer.

The bailout plan calls for the government to borrow up to $700 billion to buy troubled assets, and then sell them as the economy improves.

"Now some people, [including investor] Warren Buffett and others have argued to me, and said 'Hank, if you do this right the taxpayer could actually make money on that.' We're not saying that because I see this as a risk, depending on how the economy does. I believe the cost to the taxpayer will be far less than what is actually spent to buy these assets," Paulson said.

Still, Paulson understands many Americans are angry that they're being forced to bailout Wall Street recklessness.

"I would be angry too. People are frustrated. They're angry. They're angry at the excesses. They're angry at executive compensation. They're angry at a whole series of things," Paulson said.

"Let me suggest one of the reasons that people are angry,” Pelley said. He read from e-mails uncovered by federal investigators. The e-mails were written by analysts for the credit rating agencies on Wall Street.

One of the e-mails said, “quote, 'It could be structured by cows and we would still rate it.' And this one, this is my personal favorite, one Wall Street analyst to another wrote, quote, 'Let's hope we are all wealthy and retired by the time this house of cards falters.' They were writing these e-mails nearly two years ago. Why are we bailing these people out?" Pelley asked.

"Scott, first of all, that is outrageous behavior. Absolutely outrageous behavior. But what we're doing, right now, Scott, is working to protect the American people. Because a breakdown of our financial system is going to hurt the American taxpayer," Paulson said.

"Once this bailout proposal, as it's called, takes effect, are we out of the woods?" Pelley asked.

"We will have turbulence and turmoil in our financial system for some time, but I believe that this is going to work and it will instill the confidence in our system and the stability we need to allow us to work through this very difficult period and to let the economy continue to function the way it needs to function," Paulson replied.

[hieroweb]

So we should be okay with a government that comes out and tells us this bill needs to be passed right NOW without any checks and balances in place? Does anyone have any idea why a government would come out and make an unbelievable request? Why are they trying to shove this down the throat of every American? Could it be that Paulson wants to take care of his own base? Paulson who is an ex Chairman and Chief Executive Officer of Goldman Sachs with ties to AIG and other recently taken over companies is the man pulling the strings. It seems that the hurry to get this bill approved is more about not finding out certain details about Paulson%u2019s past than it is about helping our country. This administration has never been up front with the American people so why would they start now. Americans should be in an UPROAR over what is going on right now!

[sherri723]

You want stimulation of economy - GIVE THE MONEY TO
every US citizen adult, 21 and over (with some exclusions i.e., inmates) - and watch us roar! Give US the power to get ourselves back in shape and it will immediately affect every rural and metro. city in this country! How can the economy work when there''s little or no money in our hands to give into it? Give us an equal share, rich or poor and TRUST US to return it back into the system and relieve our pressures of debt and livelyhood! To be able to repay, to build and provide for ourselves, which in turn stimulates us all. It''s simple - and it''s the only answer to get the entire country moving again. Every bank, company, business and family would benefit from it and give us all a chance to recover.........not just Wall Street, investors, banks, etc. who got us into this mess!! Share it and watch it heal in no other way.

[wfl56]

I thought you guys had a repputation for asking the hard questions. During this past Sunday''s interview with Mr. Paulson, I saw no evidence of that. In my opinion there were a few hard questions that weren''t asked.

1. What do you see would be the outcome if the government did nothing and allowed the market correct itself?

2. What exactly would the government get for it''s $700b dollars?

3. Who would the government sell these risky loans too? If no one is buying them now, who would be our market?

[txgrouch2006]

Oops, sorry for dropping off the topic of my previous post.

I was discussing

TERM LIMITS FOR ALL MEMBERS OF CONGRESS

It''s time.

[txgrouch2006]

Would require an amendment that would have to get the support of 2/3 of each house first, or a special convention (never done before). Not likely. Also, you are condemning the good with the bad, and throwing out any institutional memory. They''''d ALL be Palins if we did this.
Posted by mbfaust at 01:06 AM : Sep 30, 2008

I suspect that there is SOME WAY to accomplish this without creating the obvious conflict of interest with Congress.

THERE ARE NO GOOD ONES. Any "institutional memory" IS BAD MEMORY.

How much good did the "good ones" and "institutional memory" do us to this point????

[corbon2]

http://www.youtube.com/watch?v=_MGT_cSi7Rs

DENIAL at it''s finest, no more Fannie Mae, off with their heads!!!

[corbon2]

http://www.youtube.com/watch?v=NU6fuFrdCJY

Corruption in government...No WAY!
This is informative

[mbfaust]

txgrouch2006:
Small problem. Term limits for members of Congress are unconstitutional. Would require an amendment that would have to get the support of 2/3 of each house first, or a special convention (never done before). Not likely. Also, you are condemning the good with the bad, and throwing out any institutional memory. They''d ALL be Palins if we did this.

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

www.larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

http://larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

http://larouchepac.
com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

http://larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[rosyred2010]

If you REALLY want to see how this mess got started and the proof behind it, this is the video you need to watch. The solution is there and its simple. Believe it or not, we''ve been in this situation before and this video does a great job explaining it. Look for yourself.

http://larouchepac.com/firewall

Video: Firewall-In Defense of the Nation State

[joelewiz75]

Wolf, wolf... no wait I am serious this time. Peter''s trajedy may be our own.

[firelight2]

Here''s a video on how we got into the financial crisis..it''s pretty good!

http://www.youtube.com/watch?v=NU6fuFrdCJY