So the problem is that Paulsen's proposal does not help we-the-people, the consumers upon whom our economy counts most.  The proposal bails out the rich, but at cost to us -- so we will spend even less.  

Particularly problematic is the Republicans' warning against any tinkering with Treasury's  no-strings-attached give away to Wall Street.  If the Republicans have time to play politics as usual the Congress has time to review  options.

Also as one of the financial bloggers asked (apologies for not recalling which one), "What changed so drastically between Monday and Friday that this unprecedented robbery of the US Treasury  requires immediate and unreviewed approval?"  If there really is such an emergency then the people who are going to pay the bill deserve to know what it is.

Finally, this wording should be a deal-breaker for any one who pretends to fiduciary responsibility to American taxpayers:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

This is the unitary executive with Henry Paulson instead of George Bush as monarch.  Were there doubt about the false urgency of this that raw power grab dispels them.*
We have time to  think about this.

 and don't ask any questions.  At least that's how I interpret the proposed law.  I do like its simplicity.  It's so simple that it makes me think that the Fed doesn't have more than a vague idea of how to proceed.  

I'm with Krugman on this.  

700B?!

ordinarily, every lending institution has some of these loans, it's the nature of the business. foreclosure is the last gasp of real estate backed lending (banks aren't in the business of real estate), but may be the only way to recover the balance due, assuming the underlying asset value is close to or greater than the loan balance.

in ordinary times, this will probably be true, or at least reasonably close. these are not ordinary times. thanks to shady loans by brokers, and incredibly lax oversight, by all the internal and external groups charged with making sure these loans have a reasonable probability of being repaid per the terms, and the plummeting housing market, the assets underlying these loans were either inflated in their value to begin with, or their value has dropped like a stone.

in essence, we, the people, will be stuck with loans that will never be repaid, and real property that will eventually be worth nearly nothing, as the improvements deteriorate from lack of maintenance and occupation.

this really amounts to a 700 billion dollar bonanza, for all the overpaid ceo's who profited in the first place.

I think he's right, despite all the progressives on this blog who will disagree. Government has no business bailing out banks, it also has no business telling banks who they must lend to. Lastly, it's pretty sure that the brought and paid fors in congress will bow to the will of their master: the Fed. Some fiscal conservatives have been griping for years about fiat currency and the unelected, massive power of the Fed. They were dismissed as kooks by both sides -Repubs bec ause they can profit under regulated markets, esp if they gain enough political control - and progressives because if progressives believe in anything it is the unlimited power of government to do good preferrably with other people's money and labor.

In time the housing market will recover. Why is it that those institutions holding these mortgages can't hold on until then? Are these homes worthless?

There is no oversight by the other two branches of government. This is unbelievable-the executive branch, Bush and Cheney and their cronies get to decide how to "allocate" all that money-who does it go to? Not any of us that's for sure and NO ONE can question it. Is this a joke? Cause it's frightening, not funny.

There are other ways to address this problem and I'm frankly not even sure that this proposal would fix the problem but even if it did it is simply not worth it.