Treasury and lawmakers battle about foreclosures

Treasure Secretary Henry Paulson along with members of congress fought about issues concerning the US bailout plan. Paulson said that the government bailout plan isn’t a be all cure all kind of deal, but would best be used to rescue financial institutions so that the entire economy doesn’t suddenly collapse. It wasn’t supposed to cure the economic problem, just help it out. The treasury has been accused with arbitrarily coming up with plans and then enacting them. Paulson has admitted of hearing about a plan to rescue average Joe homeowners but said that the plan by the treasury department seemed sketchy. Rep Barney Frank of Mass. said to Paulson that the Federal bailout plan was doing nothing to stop the foreclosure pandemic, and this is killing the economy. Five million more foreclosures are expected by next year, and if nothing is done to stop them we are in real trouble. A 25 billion dollar plan to give lenders a share in government money could stop almost two million foreclosures from occuring in the future. Federal Reserve chairman Ben Bernanke is in favor of a proposal from the fed to slow down the rate of foreclosures. Paulson is not a fan of using Fed bailout plan funds to bailout automakers because they should be focusing themselves on producing more energy efficient cars and not borrowing Federal money. Bernanke insists that putting more money into banks is the way to stop the financial crisis because more loans will be given out this way and confidence will be restored. He says this as home prices continue to plummit (no buyers being able to get loans), unemployment on the rise, and foreclosures riseing in numbers. He plans on saving a large sum of bailout plan money for Barack Obama’s administration. The first 350 billion dollars has already been spent, mostly given to large financial institutions.