$700 Billion Bailout - Options and Opposition
by John Seo
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At today's senate hearing, Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Chairman Ben S. Bernanke have prepared to answer questions and testify on behalf of the $700 bailout of American Financial Institutions affected by the mortgage crisis. It is an attempt to keep banks liquid and lending money in a troublesome time. As noted at the meeting by Senator Jim Bunning, Republican Kentucky, Alan Greenspan believes that $700 billion, in the wake of major failures, is not nearly enough to solve the capital ratios of major financial institutions.

Mr. Paulson says, "I share the outrage. There's a lot of blame to go around" referring to Wall Street practices that have left a shaky foundation for major banks and financial organizations. He later stated that "This is all about the American taxpayer, if it works the way it should work, this is not an expenditure, it's an investment." It should be noted that, this could be the most government market intervention in American history.

Paulson continued, "Any banking operation in the United states that is doing business with the American public is important. The American public in dealing with the financial system doesn’t know who owns that bank. You ask me about taxpayers being on the hook? Guess what, they are already on the hook."

Many in Congress, primarily Republicans, reject the bill, or parts of it. “We must prevent panic both in the markets and in our government,” said Sen. Wayne Allard, Republican Colorado. “Overreaction, in the long run, will be worse for our economy.”

When the hearing went hours over the estimated time allotment Paulson abruptly informed the hearing, "We do have to go." And so we wait for final confirmation of the biggest government deal in history. Affecting domestic, and foreign, banks and financial institutions doing business in America.