Say NO to Paulson's Garbage Barge Trust*

The more I read and think about the Paulson's current bailout plan, the more I become convinced that the plan in it's current format should be not allowed at ANY cost.

1. Naked Capitalism: Why You should hare the Treasury Bailout Plan

2. Krugman: No Deal

3. Krugman: Thinking the Bailout Through

4. Brad DeLong: No Deal

5. John Hussman: An Open Letter to the U.S. Congress Regarding the Current Financial Crisis

6. Calculated Risk: Some Thoughts on the Bailout

7. Calculated Risk: Paulson Plan: Will It Work?

8. Jeff Matthews: “Bail Out the Drunks, O’Malley, and Round Up the Usual Suspects”

Remember one thing: The Current Paulson plan has NO PROVISION TO HELP HOMEOWNERS UNDER DISTRESS. The plan is to protect the financial institutions that hold toxic securities.

If the ordinary citizens of the United States do not want to be saddled with additional fiscal burden without any guarantee of helping the national economy, then it is important to stop the Paulson plan in its current format.

* Garbage Barge Trust

Comments

[MA]

Probably a moot comment to this post since so much as changed, but I'm not sure that helping homeowners under distress is exactly perfect. The US comptroller says now that repeat defaults are above 50%. Not a shocker in my book since those who were upside down on their houses probably don't understand debt and are likely over-extended in areas other than their home loan.

The broader theme here is that asset prices have to go down, including homes, and that is going to cause some pain. The government should try to limit the collateral damage, but the effective way to do that is not easy to discern.