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What Paulson wants to do and why I don’t like it.
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Bailout 9: Paulson’s Plan
In September 2008, the United States faced one of its most severe economic crises in recent history. The housing market had collapsed, leading to a financial meltdown that threatened to bring down the entire economy. In response, the government announced a series of bailout plans to stabilize the financial sector and prevent a total economic collapse. One of the most significant of these was Bailout 9, also known as Paulson’s Plan, after then-Treasury Secretary Henry Paulson.
Paulson’s Plan was a $700 billion bailout package aimed at stabilizing the financial markets and restoring confidence in the economy. The plan called for the government to purchase troubled assets from financial institutions that were at risk of failing, including mortgage-backed securities and other toxic assets. This was intended to remove these assets from the balance sheets of banks and other financial institutions, freeing up capital and allowing them to resume lending.
The plan also included measures to address the underlying causes of the financial crisis, such as foreclosure prevention and mortgage assistance for struggling homeowners. Additionally, Paulson’s Plan established the Troubled Asset Relief Program (TARP), which provided funds to help stabilize the financial system and prevent further collapses.
The passage of Bailout 9 was controversial, with critics arguing that it represented an unfair bailout of Wall Street at the expense of taxpayers. There were also concerns about the lack of oversight and accountability in how the funds would be allocated and used. However, proponents of the plan argued that it was necessary to prevent a total collapse of the financial system and a deepening of the economic crisis.
In the end, Bailout 9 was implemented, and the government began purchasing troubled assets from financial institutions. The plan also included measures to provide support to struggling homeowners and stabilize the housing market. While the impact of Bailout 9 was hotly debated, most agree that it played a crucial role in preventing a complete economic meltdown and stabilizing the financial sector.
In the years since the implementation of Bailout 9, the economy has rebounded, and the financial sector has largely recovered from the crisis. However, the legacy of Paulson’s Plan continues to be a subject of debate, with some arguing that it represented a missed opportunity to address the root causes of the crisis and ensure greater accountability for the financial industry.
Overall, Bailout 9, also known as Paulson’s Plan, was a significant and controversial response to an unprecedented economic crisis. While it succeeded in stabilizing the financial system and preventing a complete collapse of the economy, its long-term impact and legacy continue to be the subject of debate and discussion.
Khan for fed chair!
But this is what the progamme was designed to do
Hi, incredibly helpful video.
I love your work.
Thanks for the content.
also but bushes suck too haha
TARP (The Troubled Asset Relief Program) or formally know as the Wall St. bailout.
this is exactly what happened during the next four years. And Barack Obama gets the bad end of the stick.
what is this program?
They can't liquidate D's assets? Maybe they can try liquidating doze assets?
Thank you. I'll be here all week. Be sure to tip your waitress.
@joehlbm
He said in previous videos that the smelly CDOs are specifically packaged to contain the highest-risk mortgages that are likely to default
It seems like we could have simply doubled the mortgage interest tax credit to artificially reflate the housing market for a lot less money because it would have given the banks time, and lots of fresh capital in the form of new loans to 1/3 of Americans who own their homes outright would take out a small loan merely to bank the money. We could then phase that out over 50 years or so until their the credit no longer exists. That would help pay for it.
Concur
UDN or really if you think the dollar is going to become worth less buy DGP as gold goes in the inverse to the dollar.
Recently I made 30% gains with DGP as the dollar plunged from its 88 high down to 78. Glad I sold yesterday as it looks as though we aren't done with this deflationary picture.
Paulson's bailout is almost identical to the what the Japanese did 20 years ago. Look into how that turned out. We need to get capital flowing back to the real economy. Pumping money into zombie banks with shrinking assets won't help (and will only suck money from real projects)
Kerpal – the problem with raising the FDIC limit is that it doesn't really solve anything. It merely means that when the banks DO fail, the federal government must BORROW MORE from the federal reserve in order to meet its obligation. The result is the devaluation of currency. Just look at what has happened to the value of the dollar recently, especially when compared to Asian currencies.
Although I must admit that this is better than handing over $700B to cover bad risk by foreign investors.
You won't be wiped out because your deposits are FDIC insured.
I say the government should loan directly to the small business and AAA corporations; and keep the banks out of it.
If bailout doesn't happen, banks are frozen for big store and corner store, small as well as big business is being tossed in the crapper–they can't get quarterly cash flow from the bank to pay operating costs.
Little guys ARE screwed TWICE, but we if don't free up the system, Chinese & Europe SAID they're not going investing in our paper anymore.
Hang bastids, & stop rewarding execs for failing the country, but 1st its defibrilate the dead economy, or it IS the little guy fookayed.