Bush Warns of Long Recession Without Bailout By: Curtis Ophoven 9/24/2008 - 4 Comments In a historical event that will be talked about for years to come, President Bush addressed the nation tonight to warn the public of the largest financial crisis since the Great Depression.  Your Ad Here The administration proposing the $700 billion bailout to congress has been meeting with congress for the past few days, trying to convince congress to pass the bill for the largest expansion of government in history.   At this point, credit markets have frozen at large banks have run out of cash and cannot sell their mortgage assets because of the decline in housing prices and the flood of foreclosed homes on the market.  The bailout plan would buy up the mortgage assets from large banks at bubble values so they will have enough cash to withstand the market crisis without running out of money.  The two leaders at the forefront of this bailout, Federal Reserve Chairman Ben Bernanke and Treasure Secretary Henry Paulson have been working to solve the credit crisis since last August.  Both men have said many times that the sub-prime mortgage crisis was 'contained'.   The sub-prime sector on the broader housing market will likely be limited,” Ben Bernanke, Federal Reserve Chairman, Forbes.com - May 17th, 2007 The fallout in sub-prime mortgages ... is largely contained." , Treasury Secretary Henry Paulson, MarketWatch.com, March 13th, 2007 Time and time again, Ben Bernanke said that the problem has been avoided.  "substantial downturn appears to have waned", Ben Bernanke, Federal Reserve Chairman, money.cnn.com, June 10th, 2008  Yet here we are facing the largest financial crisis since the Great Depression and we are suppose to trust these guys that have been wrong so many times.  The only politician that has been right is Sen. Ron Paul, which has been ignored for decades. Maybe it's time to ask Sen. Ron Paul what he would do.   In President Bush's address tonight, he tried to balance telling the public the seriousness of the crisis while trying not to provoke a panic and increase the risk of bank runs.  He needs public support so that congress will pass the bailout bill, by telling the public that our entire financial security is at risk. Our jobs, our investments and our retirement is all at risk, but don't panic, everything will be just fine.  The bailout bill will fix everything.    I think the bailout is a bad idea and I reject the notion that it's our only option. We have the smartest economic leaders in the world, how could this be our only option?  It's too much money put under too few people.     Subscribe via RSS Copyright © 2010 PennyJobs.com. All rights reserved. Related Articles The Fed Throws The Hail Mary You May Soon Need a Money Saving Expert Video: Ron Paul Discusses Financial Turmoil and the Fed Dow Down 450; Gold Up $85 Who Passed the Laws Supporting Freddie Mac and Fannie Mae? << FREE >> Weekly Newsletter... Signup today and start receiving our free weekly newsletter! Reader Comments Comment 1 Maggie Says: on Thursday, September 25, 2008 9:07:18 AM I agree with the President-- If I understand Ron Paul--he doesn't want any "regulation"---that presupposses wallstreet and banks will be honest with "our" investments-(retirement funds)---but guess what--??? our experiment with lax regulations shows that mankind can NOT be trusted with other people's Money-- so I say we have to regulate now--the sooner the better-!!! Comment 2 Curt Says: on Thursday, September 25, 2008 9:30:04 AM @Maggie - I agree with Ron Paul, regulation is not the solution - nor was it the primary problem. It's true that lax regulations helped create this problem, but as Treasure Secretary Henry Paulson said yesterday in his testimony before congress, the entire regulatory system is outdated and needs to be rebuilt. But that doesn't mean we need to increase the regulations, because each regulation we add reduces the profits of our financial industry and the entire economy. The real problem was that Freddie and Fannie were sheltered from our current regulations and allowed to operate under their own monopolistic power, which led to the housing bubble. The question is why and who sheltered Freddie and Fannie from the regulation? And the answer is congress did in an attempt to plan the economy and reduce the costs of home loans to increase home ownership. This is the center of the problem. Comment 3 Kyle Says: on Thursday, September 25, 2008 10:05:55 AM I agree with Curt. The real problem wasn't necessarily lack of regulation but the fact that Fannie and Freddie were given monopoly power by the government and free reign to do whatever they wanted, secure in the knowledge they would be bailed out if they screwed up. Moral hazard caused this, not lack of regulation. I mean, if you knew beyond a shadow of a doubt you'd be bailed out if you made a mistake with your investments, you'd be inclined to take on more risk too, wouldn't you? Write a Comment Please keep comments civil and on-topic. Abusive or inappropriate comments will be removed without warning.  Name (required)     Email Address (required)     Website URL  Comment

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