This latest turn of events signals quite literally the end of capitalism. We in the US are now entering the age of fascism.

More on this story soon. For now, answer me this: what would you do with $700 billion?


Democracy Now! covered this today pretty thoroughly. Here’s the audio.

And here’s one article among thousands, this one from

Treasury Sends Congress Unprecedented $700 billion Bailout Plan

By Ron Haruni · September 20, 2008

According to Saturday’s news reports, the federal government is asking Congress for $700 billion to buy up bad debt from U.S. financial institutions in efforts to deal with the ongoing financial crisis.

The plan, part of the government’s largest financial bailout since the 1930s, would give the government broad power to purchase distressed assets of any U.S. financial institutions for the next two years. The purchases are intended to be residential and commercial mortgage-related assets, which may include mortgage-backed securities and whole loans.

The proposal, sent by the Treasury Department last night to the Congress ; requesting broad authority to finance the purchase of troubled assets, would also raise the statutory limit on the public debt from $10.615 trillion dollars to $11.315 trillion dollars in order to make room for the massive rescue.

The Treasury Department on Saturday evening issued a “fact sheet” on the proposal, where the following brief description reflects of how this new entity would function. Once the Treasury will have authority to issue up to $700 billion of Treasury securities to finance the purchase of distressed assets, the Secretary, in consultation with the Chairman of the Federal Reserve, will have the discretion to purchase other assets, as deemed necessary to effectively stabilize financial markets. The price of assets purchases will be established through market mechanisms where possible, such as reverse auctions.

To qualify for the program, participating financial institutions must be headquartered in the U.S., unless the Secretary makes a determination, in consultation with the Chairman of the Federal Reserve, that broader eligibility is necessary. Any assets purchased through the program would have to be tied to mortgages issued on or before September 17, 2008. Borrowing in support of this program will be subject to the debt limit, which will be increased by $700 billion accordingly.

The plan offered to Congress also gives the Treasury legal immunity from any lawsuits. “Decisions by the secretary pursuant to the authority are non-reviewable ; and may not be reviewed by any court of law or any administrative agency,” the proposal says. The Treasury “fact sheet” also suggests very broad powers over the management of the assets for the Treasury secretary under the proposal.

Treasury Secretary Henry Paulson “is in effect becoming the dictator of the American financial system for a few months, subject to congressional oversight,” said Wall Street historian John Steele Gordon, author of ‘Hamilton’s Blessing’ a chronicle about the national debt. [Reuters]

The proposal would require the Treasury secretary to report back to Congress three months after Treasury first uses its new powers, and then semiannually after that.

The proposed bailout plan, which is an unprecedented government intrusion into the markets, follows a very distressing week for Wall Street where the Lehman Brothers’ (LEH) failure, the agreed sale of Merrill Lynch (MER) and a government takeover of the giant insurer AIG (AIG), prompted a significant market destabilization.