The uproar by American taxpayers about the Paulson Bailout plan is likely to torpedo this plan. Even amongst Republican lawmakers, the plan is looking like a complete bust.
Just moments ago, President Bush was on TV asking for American support for the plan. He claimed that if we do not support Paulson’s proposal, America would face a severe and protracted recession.
In essence, he tried to scare us. To me this smacks of fear-mongering, the tactic the Bush Administration used to goad Congress into signing the Patriotic Act and Americans into a war in Iraq. So, from here on, I am going to call this plan the Economic Patriot Act.
If enacted, Paulson’s Plan the Economic Patriot Act would be the first of many trips to the well. This bill will not stop house prices falling. It will not stop the credit writedowns and it will not prevent recession. It may well help to end the liquidity crisis banks are suffering but there are far more elegant ways to do this.
Congress you have been forewarned.