Ron Paul nails it with his assessment that with this bailout, we are just prolonging the inevitable recession. The choice is really a short recession or a long recession. If we liquidize the bad debt, let the market set the value of distressed properties, just like when Lehman Brothers went under. When the price gets low enough, it will be eventually bought. By providing this bailout, we’re prolonging the inevitable by propping up home prices and financing continuous building when there is too much inventory in the first place. And in all honesty, the value of these assets aren’t low enough, when they are, they will be bought on the open market.
Hopefully, congress will have the strength that if they do a bailout, they will pay as little as possible for these assets. And with Goldman converting to a bank, they will have access to capital through the discount window, and they will lend money just like any other bank.Â
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