More Details Emerge on the Bailout Proposal
Here's the summary of the Bailout Proposal from Nancy Peloisi's office.
It's now a $350 billion bailout, at least up front. I'm not seeing anything that prevents home foreclosures or that helps those who underwent foreclosures in the past year.
The government can use its power as the owner of mortgages and mortgage backed securities to facilitate loan modifications (such as, reduced principal or interest rate, lengthened time to pay back the mortgage) to help reduce the 2 million projected foreclosures in the next year
There's tax relief -- for banks. [More...]
Helps save small businesses that need credit by aiding small community banks hurt by the mortgage crisis—allowing these banks to deduct losses from investments in Fannie Mae and Freddie Mac stocks
Is there tax relief for consumers? Can they deduct the interest they paid on the credit card debt they accumulated trying to stay afloat?
The non-economist in me wonders if they considered funding all $700 billion now but using $350 billion to bailout banks and mortgage companies and the other $350 to help consumers get out of debt? Seems to me that would be money consumers could put back into the economy.
I'm not saying this isn't a good proposal or an improvement, I have no idea. I'm just passing on the information as more details come out.
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