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Thread: 120 economists oppose Paulson's Proposed 700 billion bailout!

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[quote=YVONNE,325962]In order to deal with the current financial crisis, Paulson, the Treasury Secretary, and Bernanke, the president of US Fed Reserve made a proposition to US Congress, hoping Congress can approve their 700 billion bailout plan. However, those economists seem dissatisfied with this proposal. About 120 economists from some Amercian universties have signed a petition to US Congress. In the petition, they strongly oppose 700 billion bailout plan. Here are their reasons

No.1 The government just uses the taxpayers' money to subsidy those investors. This is unfair. It is normal that the investors take risk to make money. At the same time, they should bear the losses themselves. The taxpayers have no obligation to pay for them.

No.2 The plan is ambiguous. "If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards."

Meanwhile, FBI is probing Lehman Brothers, Fannie Mae, Freddie Mac and AIG. Those four companies are suspected to be involved in mortgage loan frauds. If it was true, I guess that US Congress might not pass Paulson and Bernanke's proposal. 
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