The Proposed Bailout

Recently in the news talks have begun to come up about an extremely large government payout to help boost the US stock exchange. The check valued at over $700 billion dollars would allow the government to buy up failing companies that are essential to keep US markets afloat. The idea behind this is to raise the value of these companies, boost their stock price, and artificially raise the overall stock market hoping that the raise in big name stocks will get people to start buying again. The people proposing this idea are Treasury Secretary Paulson and long time Federal Reserve Chairman Bernanke. Both of these men are very intelligent and well versed in economics but their plan, if it fails, could not only drag the stock market down further, but could completely destroy the value of the dollar. The stocks they are proposing investing in are known by analysts as "toxic waste" stocks meaning that if invested in, they have absolutely no way to honor their contracts and pay that money back. The last time we allowed these two people to act without keeping them in check they were only given $29 billion to help keep JP Morgan afloat and succeeded in destroying Fannie Mae and Freddie Mac, which are the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation respectively. They also destroyed AIG, the American International Group which at the time was the biggest insurance company in the US. Although their plan may save us, with the amount of money we are lending them this time, the result could be much worse.