How to Build a Better Bailout

I hope that Mr. Rosner also sees the 700B as just the tip of the iceberg.I am from the Southwest, I've been to three goat ropings and a county fair, but I haven't ever seen anything like this!!!

Anything congress does will only make things worse in the long term. Government undertakings always backfire with catastrophic results.

All interesting ideas, but you missed one more...have the FDIC increase insurance up to $500,000 to build confidence in banking and people will make deposits, giving banks money to operate. No cash lay out is needed and the risk is minimal so long as you fix the problems and stop the fat cats from taking it all again.

How can Ben and Hank survice this. They should resign after telling everyone things are fine for so long. Let us not forget these are the same guys that brought this plan forward but have drasticly failed to serve us well for the past 18+ months while this all came to be.

The Democratic party vs Clinton caused this Problem and this Bailout will just let them screw the American people again. Will the american people ever learn that the only Dem is one we defeat and kick out of office.Every state they conrol is a Disaster!!!!!

If only the government would listen to this proposal. I fear they are too far down the road though and selling out our future for short term political and short term market gain.

I'm not willing to play politics with this and blame the Rep or Dem's. This is a different party...of greedy scum that take everyone else for granted. It will never be solved by one party or the other. In fact, look who we have working on the solution...a Congress that likely has blown more than 700B in earmarks in the past 9 months. America needs to wake up and stop playing along party lines!

Finally someone is seeing this correctly. Just create a floor for the mortgage securities and create a market. The government doesn't have to actually take possession of $700 billion of junk. Use 10% to actually buy up some of it. The bean counters will then have a way to justify holding these to maturity.

More Government in our lives....someday soon you'll send your entire check to Washington and they'll decide what you get....foodstamps, housing, transportation... It's time...in November, make the decision...THROW OUT ALL INCUMBENTS! Even if you think "your favorite" is good...WRONG, THROW THEM ALL OUT!! From this day forward, nobody serves more than 1 term...until maybe, just maybe they get the message that WE THE PEOPLE are in charge again.

This Joshua Rosner is right on the money. Once the government buys the debt (over paying for it), then the next step would be for the government to sell it at a discount to favored groups (later, under either Republican or Demorcratic rule). If the government really thinks (wrongly) that a total action must come quickly, then the government ought to guarantee a profit to itself by being able to return any loss it suffers (over a set profit of say 5%) in four years, and allow the holders of these mortgaged back investments to pay the debt to the government over time, say five years. To me it's a no brainer!

Josh, I agree with your concerns--lets buy down the debt to its real value and get this mess behind us. Japan has proven the alternate concept is another disaster--it only saves the people who put us there! We MUST get leveraging under control! This will require a culture shift--pay as you go. Nothing short of that concept will have a lasting positive impact.

good - no sidekick for Aron on this one!

The bailout does not fix the problem. Great, the government is the buyer of last resort for bad debt properties. We need to focus on a buyer of first resort. This is the only way properties will begin increasing in value - last resort bailouts will just drive the prices and economy further into a hole. The only way we get more buyers or first resort is to rebuild our manufacturing sector. This is the only sector that our government tracks "value added." We need an economy that is adding value. For this bail-out to have any long term benefit, we need to outlaw the purchase of any foreign goods worth more than $1000 by anyone involved in the bailout. We don't need people sending money overseas after the government comes in to help. I'm sick of seeing bankers and people around town driving around in BMWs, Toyotas, etc... when this economy is in a deep recession. Quit sending money overseas. "The fundamentals of our economy are strong." Nice job Bush. I don't what is worse - your handling of Iraq, the Economy, or the Presidency.

This is a big mistake.

Times like these make me wonder if we'd be better off if Flight 93 had reached its target.

FANFOREVER Increasing FDIC to 500K is a horrible idea.... Most people do not have 500K sitting in cash anyways. so you are creating a bigger government program for no reason. The problem with what is going on is that we are bailing out these companies without getting anything in return. Funny, no one is talking about the 25 billion that the automakers got!! Let Ford and GM go chapter 11!! I am sure a better automaker will step in and not have to deal with the unions.

A number of problems with Rosner's idea. First, it does nothing for providing liquidity to the credit market but slowly over time. This alone makes it a nonstarter. Acting as market maker doesn't suddenly make bad debt a new desirable trading vehicle. Loaning money to replace the loss of equity on a company's balance sheet and then asking for an equity stake is counterproductive. The request for that equity stake dilutes the stock which offsets the loan you just made. What now? More loans to offset our request for an equity stake?

To jrsaal: All democratic states are a disaster eh??? What about California and Florida my good man???

We Are Being SCAMMED OUT!!!

I hate to say this but I don't think this will help. Housing values are still falling and there is no announced stop to the forclosures that are on the books. Mortgage Interest rates are rising when it was planned they would fall. Unemployment is spiking and more people are losing their homes, soon affordable housing will be under freeway overpasses and cars will be stolen shopping carts. Clothing will be worn in muliple layers. This only serves Wall Street and maybe there will be some trickle down effect to Main Street in 18 months