Seattle Bubble Forum Archive

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Congress doesn't know what to do, except to generate another economic stimulus package......
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Sept. 17 (Bloomberg) -- The U.S. Congress is unlikely to pass new legislation to overhaul financial regulations this year because ``no one knows what to do,'' Senate Majority Leader Harry Reid said today.
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``We are in new territory. This is a different game,'' Reid said at a briefing in Washington. Neither Federal Reserve Chairman Ben Bernanke nor Treasury Secretary Henry Paulson ``know what to do but they are trying to come up with ideas,'' Reid said.......
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......Reid said that Paulson ``recognizes that nothing is going to be done this year.''
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``It is a multitrillion dollar issue that's facing America and we can't do it on some timeline that is unrealistic,'' Reid said.
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He said the Congress would remain in a so-called pro forma session leading up to the elections so that the Banking and Financial Services Committees can continue to look into the matter. ``The committees is where the action is anyway,'' Reid said. ``If there is a need for us to come back, we stand ready and willing to do that.''
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He also called for a second economic stimulus package this year, saying if the federal government can put up billions to help companies such as AIG, it can afford to help out struggling Americans.
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Reid said lawmakers have decided to keep a proposed $25 billion loan to the auto industry out of the stimulus package, leaving that instead to a stopgap spending measure needed to fund the federal government while Congress wraps up its annual budget work.
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It seems like people have been predicting this result for a long time on this board (maybe 2 years...). Congress doesn't really know how to deal with problems they've seen before (rough economy, stimulus checks!) so why should we expect them to know what to do when a nearly unprecedented problem is thrown their way.

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Totally agree RCC -

I had a conversation with my sister recently concerning some "family" investments. I expressed my concern over the general direction of the economy and suggested that we might want to consider seeking refuge. Her comment was "We are in it for the long term. The government will take care of the the problems."
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I never cease to be amazed at the apathy of the general populace about the current condition of the economy. I'm surrounded by people who believe the "government will take care of it".
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I do not share that faith, especially when I read about "we do not know what to do" comments as made by Senator Reid. In the meantime, methinks I am going to start moving totally toward cash with my personal investments. I worked too hard for the nest egg I've accumulated over the years to see it evaporate overnite.
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As I study congressmen and the way the whole thing works, I SERIOUSLY mean it when I say the only thing congressmen are good at is getting elected, and even their handlers do most of that for them.

If one is REALLY inept at even that, they just write down everything for him to say and make sure he brings a teleprompter everywhere he goes.

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It appears that they have decided that they do know what to do after all.
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"At this point they have just decided that fiscal responsibility goes out the door." - Boris Schlossberg, director of currency research at GFT Forex in New York.



NEW YORK (Reuters) - The U.S. government is preparing to mop up hundreds of billions of dollars in bad mortgage debt, after curbing short-selling and guaranteeing mutual funds in an effort to stabilize financial markets.....
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......Lawmakers promised fast action on the toxic-debt plan, which two banking industry sources put in the $500 billion to $800 billion range. A Treasury spokeswoman declined comment....
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.....The U.S. government has pledged more than $1 trillion to prop up the financial system and housing market.....
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.....A government plan was expected to be sent to Congress this weekend.
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"They (Congress and the Federal Reserve) are absolutely petrified of just a run on financial assets and they came very close to that on Thursday," said Boris Schlossberg, director of currency research at GFT Forex in New York. "At this point they have just decided that fiscal responsibility goes out the door.".....
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