socialism? here we come??

wackdeafboy · Oct 11, 2008

http://afp.google.com/article/ALeqM5...zCBZc8kHiiduCQ

looks like we're heading to socialism...

WASHINGTON (AFP) - Treasury Secretary Henry Paulson said that the US government planned to invest directly in US banks to prevent them from failing, expanding the focus of the government's 700-billion-dollar rescue plan.
"We're going to do it as soon as we can do it and do it effectively," Paulson said on Friday when asked about an equity-buying plan.
"There's no doubt in our mind, given the magnitude of the issue ... that we can use the taxpayers' money more effectively and efficiently ... if we develop a standardized program for making, encouraging equity participation," he added.
A 700-billion-dollar US government rescue plan approved last week had initially focused on the problem of liquidity for banks by offering to buy up their toxic assets.
Paulson's comments underline how the Treasury is increasingly in favor of investing directly in struggling banks which are unable to raise new capital from private investors.
Implementing the rescue plan, called the Troubled Asset Relief Programme (TARP), is taking time because of the complexity of the problems, but Paulson said officials were "working around the clock to deal with this."
Paulson has warned that the first purchases of toxic assets could take several weeks and he gave no timetable for the equity purchase program.
"I'm not prepared to say today about the relative sizes of the two efforts," he said when asked about the amount of money that would be spent on buying assets relative to the amount for equity.
Under a G7 "action plan" announced Friday, the economic powers would seek to ensure that banks "can raise capital from public as well as private sources, in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses."
Earlier this week, the White House said such a plan to directly recapitalize troubled banks was "actively" being considered as part of the rescue package.
Paulson said Friday that efforts to fight the financial crisis would be in cooperation with the G7 and said any government stock purchase would be in non-voting shares.
"As we develop plans to purchase equity, as in the approach we are taking to broad mortgage asset purchases, we are working to develop a standardized program that is open to a broad array of financial institutions," Paulson said in a statement.
"Such a program would be designed to encourage the raising of new private capital to complement public capital. Consistent with the legislation, any equity the government purchases through a broadly available equity program would be on a non-voting basis."
Such a move would follow similar action by British authorities, and would give the government special shares of the banks in exchange for helping boost badly needed capital in an effort to unclog credit markets.
Analysts and officials said there is a precedent in the Reconstruction Finance Corporation created during the Great Depression.
Click to expand...

IGOTJOINTS4YA · Oct 11, 2008

This man laid the first seeds of socialism...every presidents pretty much been pushing it forward slowly or just managing it.

Forums

socialism? here we come??

wackdeafboy Banned

IGOTJOINTS4YA Banned

Share This Page

Network

Forums

Help

Find Us On

Useful Searches

socialism? here we come??

wackdeafboy Banned

IGOTJOINTS4YA Banned

Share This Page