4 Basic Questions about the Bailout

[rucky]

I've read a bunch, but still can't answer these basic questions:

1) Who gets the money?

1b) How is this determined?

2) What do taxpayers get in return?

2b) What is the value of whatever we get in return?

[gateley]

1. Kick. Good questions, and even I might be able to understand the answers. Thanks. nt

[BridgeTheGap]

2. Stop asking so many questions and just get with the program! It's highway robbery

and they ain't finished yet!

[Eric J in MN]

3. Henry Paulson will buy "troubled assets"...

...(he defines the term) from any financial organization he chooses.

Those financial organizations get the money.

Henry Paulson says that we will have 10% unemployment unless he's allowed to do this (I disagree.)

Regarding the value, this is a cash-for-trash exchange.

The main idea is that he's going to buy Wall Street's worst products. As a supplement, he's also supposed to buy shares in some of the selling corporations.

[michaelasher]

4. Some answers...

http://www.forbes.com/businessinthebeltway/2008/09/28/bailout-financial-crisis-biz-wash-cx_bw_jz_0928agreement3.html">What's In The Bailout Deal
http://www.powerlineblog.com/archives2/2008/09/021634.php">The Bailout Deal: What Is It?

[wtmusic]

5. .

1) The federal government gets the money. It is an OK for Treasury Secretary Paulsen to spend up to $700B to buy "troubled" assets like mortgage-backed securities for the stated purpose of inducing liquidity.

1b) Determined by Paulsen himself, and watched over by an oversight committee.

2) Taxpayers would get their bank not freezing up and their assets being available to them, according to worst-case scenarios.

2b) The value is whatever value you place on being able to go to your bank and get your money out, again according to worst-case scenarios.

Good questions, and for the most part unanswerable at this point.

[sabrina 1]

6. I have some questions also

1) Can this money be used to help foreign banks?

2) Will CEOs be able to raise their salaries enough to make up for the ban on 'golden parachutes' since they refused to cap the salaries of CEOs?

3) It says that Henry Paulson has the authority to hire all personel needed to put this plan into action. What's to stop him from hiring people who are not qualified or who have a vested interest in how this money is distributed?