Repealing the Bailout

by Sal on November 17, 2008

in Economy,Politics

Senator Jim Inhofe (R-OK) has circulated a letter this week to the Senate, making known his intentions to bring forth legislation in the lame-duck session of Congress to attempt to freeze the remaining funds authorized by TARP (Troubled Asset Relief Program), also known as the Paulson Plan or the Socialist Bailout Fiasco.  From Inhofe’s letter:

I stated at the time that my vote was against the Paulson plan – not against taking extraordinary action to provide necessary confidence to financial markets. I stated that “The Paulson plan would have Washington take $700 billion worth of toxic Wall Street assets from financial firms’ balance sheets and put them on the balance sheet of the federal government…. I’m not confident in its success.”

The critics were right. On October 14th, in a significant shift, Treasury outlined a plan to directly purchase equity stakes in of major financial institutions. The Wall Street Journal noted that “critics…say Treasury should have formulated a comprehensive plan earlier in the crisis.” This past week, Secretary Paulson announced that he has completed a remarkable about face, as summarized by November 13th Investor’s Business Daily front page headline, which read, “In Major Reversal, Treasury Won’t Buy Bad Mortgage Debt.” This is a complete reversal. Why did Paulson reverse course? Thursday’s Los Angeles Times provides the answer. “Treasury Secretary Henry M. Paulson’s decision to abandon plans to buy troubled bank assets shows that he has come to two conclusions about what was once the chief focus of the government’s $700-billion bailout: The first is that it wouldn’t work.”

Republicans should have stood firm and opposed this plan from the beginning.  The plan was a disaster in the making, and a shortcut to on the road to Socialism.  Conservatives today need to rally and oppose any further expenditure of funds as part of the Paulson Fiasco.  It is the returning to our fiscal roots that will help win back elections in 2010, 2012, and beyond.  If we are going to win, we need to stand firm on principle.  A good first step would be to reignite our opposition to the plan and pressure Congress to act to repeal it.  The initial fear that gripped everyone in September has abated a bit, and while people are still worried about a deep recession, a push against an unpopular, unfocused bailout will not be met with massive resistance from the public.

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November 17, 2008 at 10:52 am

{ 5 comments… read them below or add one }

Mike November 17, 2008 at 10:05 am

One thing in defense of the original pro-bailout people (of which I am not), this is a different plan than the first one. They probably should have foreseen such a significant change in it, but it is a different plan.


Sal November 17, 2008 at 10:23 am

Originally Posted By Mike
One thing in defense of the original pro-bailout people (of which I am not), this is a different plan than the first one. They probably should have foreseen such a significant change in it, but it is a different plan.

While that is certainly true, it was also irresponsible of the legislators who sponsored this, primarily because the bill itself gave such a broad range of powers to the Secretary of the Treasury. The legislation was not specific in how the money would be used. The plan that was touted in the press and by the administration was not spelled out in the legislation. So, although some of the original supporters of the bill may have acted in good faith, it was still irresponsible of them not to insist on more tightly controlled language in the legislation.


Mike November 17, 2008 at 10:30 am

True, but we shouldn’t call the same plan. The reason why so many people are outraged over this now but not before is because it isn’t the same plan.


Jason November 17, 2008 at 5:14 pm

When the bill was enacted a Congressional Oversight Panel was created to review the state of the markets, current regulatory system, and the Treasury Department’s management of the Troubled Asset Relief Program.

So what is really the problem?


Terry December 11, 2008 at 11:35 pm

Senate totaly screwed up with TARP and had the balls to tack on an extra 100 billion+ in pork. Yeah you need to repeal it.

JP Morgan said today he never wanted the 25 billion paulson gave him. but thought it was his patriotic duty to take it, lol.

Ask him for it back..give it to the Auto dudes where it will actualy keep the economy from imploding. Senate is Screwing up again this time by not bailing out main street. Gave over 7 trillion to the banks banks. 2 trillion on a undeclared war they can’t win..fightin cochroaches. Now all of a sudden they are worried about 14 billion and going against the constitution..give me a break. This auto thing is all about keeping wages low.


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