Paulson, Congress and the Bailout

Paulson and Bernanke were on Capital Hill and were grilled pretty hard by the members of Congress. Henry Paulson fought back pretty well stressing that the governments financial rescue package was not a,

``panacea'' for economic difficulties, clashing with lawmakers who want the funds to help beleaguered homeowners.

``The rescue package was not intended to be an economic stimulus or an economic recovery package,'' Paulson said in testimony to the House Financial Services Committee in Washington. The Troubled Asset Relief Program was designed to stabilize financial markets and the flow of credit and ``is not a panacea for all our economic difficulties.''

Barney Frank was quite aggressive cutting off Mr Paulson and saying that ``the bill couldn't have been clearer'' in also being aimed at reducing foreclosures. I could only thinkthat Paulson cannot wait to see Washington from his rear view mirror!

Paulson countered by telling Congress that he has no intention of using the second half of the $700 Billion program but rather leave it for the Obama administration to deciede what to do with it.

Federal Reserve Chairman Ben S. Bernanke told lawmakers at the hearing that using the TARP for buying stakes in banks is ``critical for restoring confidence and promoting the return of credit markets to more normal functioning.'' He warned that lending in the U.S. is ``still far from normal.''




CLICK HERE to read an excellent write up from Bloomberg news.


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