“It’s gut-check time,” said Robert L. Borosage in The Huffington Post. Treasury Secretary Henry Paulson has demanded a $700 billion blank check from Congress to save Wall Street. Now the question is whether Paulson can “panic Congress into folding,” or if the Democratic leadership will “insist on common sense” regulations to accompany the bailout.
The Treasury plan is to buy up distressed mortgages at a huge discount, then auction them off, said William H. Gross in The Washington Post. This should yield a nice profit for the government and free up troubled banks to start lending again, so it’s not a “bailout of Wall Street but a rescue of Main Street.”
Taxpayers deserve something to justify the risk, said Karl S. Okamoto in The Philadelphia Inquirer. Paulson wants permission to “invest $700 billion—at his discretion, with no strings—into so-called mortgage-related assets,” which “essentially places the federal government at the helm of the world's biggest hedge fund.”