Well, the plan is to try to raise the value of all mortgages in the country so that the assets on banks' books look larger -- are larger than they are right now.
There's some magic about liquidity, but fundamentally you have to buy a lot of mortgages to do that. And the Senate added that, at the same time, we're not going to make people pay back their mortgages.
That's going to -- that may be the right thing to do, but that's going to add tremendously to the cost, along with the Senate said the purchases now have to guarantee the level of retirement savings in 403(b) plans. The cost is going to really explode here.
Friday, October 3, 2008
"a pinata full of ridiculousness"
Three economists discuss the bailout: