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The Associated Press and other news media outlets this morning are reporting that the White House is considering following Great Britain’s lead and taking ownership stakes in certain US banks. An administration official, speaking anonymously, said the $700 billion rescue package passed by Congress last week allows the Treasury Department to make this move.
This approach has the support of Senator Charles Schumer (D-N.Y.). He argues that injecting fresh capital into US banks who want to participate would be an effective way to get them to resume lending and that taxpayers would benefit because the government would receive an equity stake in the bank in return for providing the capital.
Even some longtime Republicans are warming to the idea after years of defending laissez-faire economic policies. William Poole, a staunchly free-market Republican who stepped down as president of the Federal Reserve Bank of St. Louis in August, told the New York Times, “We need to eliminate uncertainty as fast as we can and one way to do that is by injecting capital directly into banks. I think it could be done very quickly.”
Others shudder at the notion of government owned banks. After all, do we trust the same folks who handled the Hurricane Katrina response to hold the purse strings of our life savings? After this, what’s next? Government run health care?
Also Interesting:
Concerned Citizen October 9, 2008 1:37 PM
Looks like we are only one step away from Socialism...more importantly one global bank...and I agree, if we trust the government with our money why not our health!
great idea October 9, 2008 2:52 PM
Yeah, lets follow the lead of the mother country!
NoMoreNicksLeft October 9, 2008 10:19 PM
That's so progressive... er, oh, wait.
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