FC2Video

http://www.americanprogress.org/issues/2008/09/fair_nor_effective.html

Ed Paisley of the Center for American Progress shares his thoughts on the unprecedented economic bailout being planned by the federal government.

Unless U.S. Treasury Secretary Henry Paulson’s first stab at a $700 billion rescue of the global financial system is revised to incorporate restructuring troubled mortgages, it will be neither fair nor effective. Paulson’s draft legislation attempts to rescue the balance sheets of Wall Street but does almost nothing for homeowners on Main Street. That’s a fundamental flaw. The U.S. housing market won't recover without restructuring of underlying mortgages that are troubled. Global credit markets will not respond to this exceedingly expensive plan unless we get our fundamentals right. Moreover, taxpayers will be saddled with increasingly worthless paper as many of the underlying mortgages fail.

The Paulson plan demonstrates a disturbing disconnect between the ...