Earlier today I wrote a post entitled Lions and Tigers and Bears, Just Say No! on one of my outside blogs, Rich Talks real Estate. That post was centered on the reports that came out regarding Secretary of the Treasury Henry Paulson's decision to "redirect" the $350 billion that remains of the $700 billion in rescue funds to help lenders who issue credit cards, auto and student loans. If you read the post I wrote on my outside blog, my anger at this decision will be evident.
I am upset about this "redirect" of the taxpayers' money to help these institutions. It is one thing to buy bad mortgages that are at least securitized by a property and quite another thing to essentially donate money to these consumer loan institutions. By the way, these are the same institutions who, in many cases have outsourced American jobs. This outsourcing ironically may have added to the very defaults that have endangered the viability of these institutions. And another thing, many of these formerly employed taxpayers who defaulted on their credit cards, auto loans, and student loans, will now will be helping to ensure continued employment for the people who now do their old job in a foreign country. Can you see why I am more than a little disturbed by this "redirecting" of the bailout money?
If Secretary Paulson wants to bailout these consumer lenders, that should be done with money appropriated for it in a separate bill. Those same Congressmen and Senators who voted for the previous bailout, many of whom were re-elected, will probably support it. Sorry if a bit of anger and cynicism is seeping through but did I say I am not happy. I know that Paulson has unfettered control of how he doles out these taxpayer dollars, remember our elected officials voted on no oversight, but shouldn't how he spends the money at least be in keeping with the spirit of the bill. Trading taxpayer dollars for bad mortgage debt and equity interest in lenders is bad enough, this is even worse. If you are one of those who actually believed you might get this money back at some point, I'm sorry, it will not happen.
I know the election is over, but please express your feeling on this issue to your Congressmen and Senators. Click either icon below to go to the respective homepages of both houses of Congress. It is very easy to find your Congressman and Senators on those pages.
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