Bernanke, Paulson, FDIC Eye Taxpayer Bailouts, More PowerSubmitted by northstar on Tue, 07/08/2008 - 14:53
Now there is an open proposal, "only for emergencies, wink-wink", to use taxpayer money to bailout banks. Instead, what needs to happen is for insolvent banks to fail. We are in this monstrous mess because the Fed, attempting to bail out its banking buddies in the wake of a dot-com crash, decided the way to do it was blow an even bigger bubble to reliquify banks.
That operation "succeeded" by creating the biggest housing bubble the world has ever seen. However, the patient is now on the death bed. And just as you do not give heroin to addicts to cure them, you cannot and should not even consider injecting taxpayer money into banks that quite literally deserve to go under.
Sloshing money around does nothing but zombify banks, while further depleting the pool of savings that should go to more productive uses. Inquiring minds may wish to consider Night of the Living Fed for an analysis of the Fed's role as pawnbroker, why such misguided policies are bound to fail, and what the real solution to this mess is.
More at: http://www.marketoracle.co.uk/Article5364.html
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