Face The Nation airs Sunday mornings at 10:30-11am with Bob Schieffer. This morning the discussion was about the Federal bailout, $700B, of the bad mortgage debt lead by Paulson. As of right now, there is no video link to post, so here is the link to the article.When Schieffer asked Paulson how the currently illiquid debt was going to be priced by the federal gov't, Paulson made a vague response about how if there is a bid for it by the gov't, then there may be more bids, possibly private capital bids, which may then allow it to be priced in the market. What private capital is suddenly going to want the very toxic debt clogging the system?
The 2 guests, Senator Shelby (R) from Alabama, and Representative Frank (D) from Massachusetts, both agreed that the bailout is needed. Frank emphasized that the idea is not to bailout the people who caused this problem, at the taxpayers expense, so they can be paid millions to then walk away. Frank also said that to help pay for this bailout, the top earners should be taxed extra money towards this.
Shieffer concludes that this situation is a problem brought about by deregulation. "No game works without an umpire" he says. Shieffer also quotes James Madison, who said, "If men were angels, there would be no need for gov't, or any laws."
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