Legislative Proposal For Treasury Authority (Draft Bill)

[Members Only]

So Americans, opinions on this? I know if I was American I would be very pissed at what the country is turning into. More power to the Fed, more power to the Fed... more power to the Fed. Yuk. :|

Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Unreviewable power too.


The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall take into consideration means for--

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer.

Protecting the taxpayer -- with another 700 billion pounds worth of debt.

The full draft is below if anybody would like to read it.

LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY

TO PURCHASE MORTGAGE-RELATED ASSETS

Section 1. Short Title.

This Act may be cited as ____________________.

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.--The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

(b) Necessary Actions.--The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall take into consideration means for--

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer.

Sec. 4. Reports to Congress.

Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.

Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.

(a) Exercise of Rights.--The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.

(b) Management of Mortgage-Related Assets.--The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.

(c) Sale of Mortgage-Related Assets.--The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.

(d) Application of Sunset to Mortgage-Related Assets.--The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.

Sec. 6. Maximum Amount of Authorized Purchases.

The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time

Sec. 7. Funding.

For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Sec. 9. Termination of Authority.

The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.

Sec. 10. Increase in Statutory Limit on the Public Debt.

Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.

Sec. 11. Credit Reform.

The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.

Sec. 12. Definitions.

For purposes of this section, the following definitions shall apply:

(1) Mortgage-Related Assets.--The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.

(2) Secretary.--The term “Secretary” means the Secretary of the Treasury.

(3) United States.--The term “United States” means the States, territories, and possessions of the United States and the District of Columbia.

[ajblaise]

Are you aware that our stock market died last week (pardon the jargon)? A fed. intervention is most welcome, as I don't wish to live through Great Depression: the Sequel.

And most economists agree. (http://news.yahoo.com/s/ap/20080920/ap_on_bi_ge/financial_meltdown_economy)

[phoenix13]

And most economists agree. (http://news.yahoo.com/s/ap/20080920/ap_on_bi_ge/financial_meltdown_economy)

Damn, and I deleted that post because I put very little thought into it...

[Members Only]

When's it going to end? Where is the government getting this money from to bail out these companies? I assume at the moment it's not coming directly from the taxpayers? Borrow more money from the FED... at interest? Print more money.

Last week, whilst being a short term fix, in the longer term is just going to create more trouble, and give more power to an all ready too powerful Fed.

I tend to agree with Ron Paul on this issue.

YouTube - Ron Paul on the Global Financial Crisis (http://www.youtube.com/watch?v=d73KlhUq1W8)

[ajblaise]

When's it going to end? Where is the government getting this money from to bail out these companies? I assume at the moment it's not coming directly from the taxpayers? Borrow more money from the FED... at interest? Print more money.

Last week, whilst being a short term fix, in the longer term is just going to create more trouble, and give more power to an all ready too powerful Fed.

I tend to agree with Ron Paul on this issue.

YouTube - Ron Paul on the Global Financial Crisis (http://www.youtube.com/watch?v=d73KlhUq1W8)

So how far would you take this? Would you let the country go into a Depression even if the fed could prevent it?

Ever since the 30's the government has been more and more involved in the economy, and look where it got us...#1.

Almost every country with a high quality of life has a government that is very involved with the economy.

That Ron Paul stuff sounds good on paper, but that's about it.

[Members Only]

So how far would you take this? Would you let the country go into a Depression even if the fed could prevent it?

Ever since the 30's the government has been more and more involved in the economy, and look where it got us...#1.

Almost every country with a high quality of life has a government that is very involved with the economy.

That Ron Paul stuff sounds good on paper, but that's about it.

If the Fed could prevent it? The Fed is one of the main reasons the US is so in debt in the first place. So now you have a case, where the ultra rich, who try to avoid taxation at all costs, are being bailed out by working class tax dollars.

Almost every country with a high quality of life has a government that is very involved with the economy.

So Americans began to have comparable standards of living with Europeans, only after the formation of the Fed in 1913?

[ajblaise]

If the Fed could prevent it? The Fed is one of the main reasons the US is so in debt. So now you have a case, where the ultra rich, who try to avoid taxation at all costs, are being bailed out by working class tax dollars?

Can you answer the question?

So Americans began to have comparable standards of living with Europeans, only after the formation of the Fed in 1913?

The economy and society of 1913 isn't exactly relevant to 2008. No one should expect that if we roll back time in terms of historical government-economic relations that we will experience anything similar to how it used to be.

[ptgatsby]

If the Fed could prevent it? The Fed is one of the main reasons the US is so in debt. So now you have a case, where the ultra rich, who try to avoid taxation at all costs, are being bailed out by working class tax dollars.

Some ultra rich, perhaps, but for the most part, no, it is still the wealthier that pay the majority of the taxes.



So Americans began to have comparable standards of living with Europeans, only after the formation of the Fed in 1913?

I think the real point is that every advanced economy has government intervention in their markets.

I also wanted to note that it wasn't the stock market that was failing, it was the entirety of the financial system. There's a good reason for the disconnect between the average person and the economists/people in the field - this stuff is highly interconnected and far removed from most people. What was being looked at wasn't just a loss of some pensioner's funds. We were talking about the complete lack of liquidity of debt. Debt that is required to consolidate the hurting companies. Debt that keeps day to day operations running. Debt that finances capital projects. Debt that allows mortgages, car payments and so forth.

The reason why it AIG and the like ran straight into a wall was because they had no bridging money to keep operating. It's the same reasons for the short-selling protections. It can actually induce the collapse rather than provide price stability.

That's the reason for the broad act. It allows the government to provide liquidity. It's not the solution I'm looking for, but I figure there is no chance that the US would ever allow broad regulation and intervention in their banking system.

[Members Only]

Can you answer the question?


It's not that simple because if it were up to me, I would not even have the Fed in the first place.

The Fed causes these problems, and then jumps into fix them, they gain more legislative power for problems that stem from them. How does that in anyway make sense?

It's a lose/lose situation for me at this point, weather the Fed brought out AIG etc... or not.

[ajblaise]

It's not that simple because if it were up to me, I would not even have the Fed in the first place.

The Fed causes these problems, and then jumps into fix them, they gain more legislative power for problems that stem from them. How does that in anyway make sense?

It's a lose/lose situation for me at this point, weather the Fed brought out AIG etc... or not.

There are no perfect markets, market failure exists. We shouldn't be left at it's whim.

Market intervention is necessary, every successful nation uses it for a reason.

[Members Only]

Here is another take on the draft. It lists what they can do with it.

The Market Ticker (http://market-ticker.denninger.net/)

[Lateralus]

Damn, and I deleted that post because I put very little thought into it...
Yeah, since the Fed caused and lengthened the Great Depression, I'd have to say I don't agree with you, at all.

[ajblaise]

Yeah, since the Fed caused and lengthened the Great Depression, I'd have to say I don't agree with you, at all.

The government at the time can be faulted with some of the several causes of the Great Depression, and to compare our current economic situation to the one 90 years ago you must draw some specific relevance.