On October 3, 2008, the Senate passed the $700 billion bank bailout bill. The crux of the bill was the same as the three page document submitted on September 21, 2008, by Treasury Secretary Henry Paulson. He Requested Congress to approve a $700 billion bailout to buy mortgage-backed securities that were in danger of defaulting. Paulson wanted to take these debts off the books of the banks, hedge funds and pension funds that held them. The bill manifested the Troubled Assets Recovery Program (TARP). It originally gave troubled banks the right to submit a bid price to sell their assets to TARP as part of a reverse auction. Each auction was to be for a certain asset class. TARP administrators would select the lowest price for each asset class, which was to help assure that the government didn’t pay too much for distressed assets. However, it took too long to develop the auction program, so instead Treasury lent $115 billion to banks by purchasing preferred stock
The bill contained an additional $150 billion in tax breaks, to be phased in over 10 years. These included an extension of the AMT patch, tax credits for research and development, and relief for hurricane survivors. The bailout was triggered by a record $140 billion being pulled out of money-market accounts, usually considered the safest of investments. That’s because investors were moving the funds to U.S. Treasuries, causing yields to drop to zero. To stem the panic, the Treasury agreed to insure these funds for a year. In addition the SEC banned short-selling of financial stocks until October 2 to reduce volatility in the stock market.
“I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. … You are a den of vipers and thieves.”
—Andrew Jackson in 1834 on closing the Second Bank of the United States.[
Andrew Jackson was the “ Tail of Tears” President, but he was right then. But as today we seem to save people with seven homes, two indoor swimming pools (In each), and multi million dollar golden parachutes.
While many people are homeless, hungry, and poor, average people lose their homes, and are turned into slaves when they need public assistance. While average peoples homes are stolen through immanent domain and other schemes the wealthy are always rescued.