The Bail-out Bill
The bill currently making its way through Congress allows the Federal Reserve to give any bank permission to make loans without having any cash on hand.
Normally, you can't make a loan unless you have some percentage of the loan value available (e.g., 9:1 means $1000 on hand to issue a $10,000 loan). This would allow banks--at the Fed's whim--to dole out as many loans as they want without worrying about the minimum.
If I'm understanding that correctly, it puts essentially infinite power in the hands of the banks. Such a measure could potentially destroy the economy irrecoverably, if abused. Even if the bankers themselves don't abuse it, it places undue power in the hands of the Fed.
The good news is that so many people are upset about this that it's taking ten minutes for the House of Representatives website to load. But go write your rep (and senators) anyway.
Normally, you can't make a loan unless you have some percentage of the loan value available (e.g., 9:1 means $1000 on hand to issue a $10,000 loan). This would allow banks--at the Fed's whim--to dole out as many loans as they want without worrying about the minimum.
If I'm understanding that correctly, it puts essentially infinite power in the hands of the banks. Such a measure could potentially destroy the economy irrecoverably, if abused. Even if the bankers themselves don't abuse it, it places undue power in the hands of the Fed.
The good news is that so many people are upset about this that it's taking ten minutes for the House of Representatives website to load. But go write your rep (and senators) anyway.