Bailout funds being spent in ways Congress never foresaw

WASHINGTON — After a bruising battle to get it through a doubting Congress, the Bush administration’s $700 billion Wall Street rescue plan to purchase distressed mortgages and other bad assets has morphed into something else entirely.

Today the Emergency Economic Stabilization Plan, signed by President Bush on Oct. 3, involves the government taking direct equity stakes in banks, and at least one bank used the money to buy a rival. The taxpayer money’s also expected to be used to buy stakes in life insurance companies, and may soon even go to help two struggling Detroit automakers merge.

In short, what once was disparagingly referred to as bailout for Wall Street now looks like a broader bailout of all sorts of troubled businesses. Some lawmakers and outside analysts question whether that’s serving the public interest as intended — or whether it’s becoming a taxpayer-financed giveaway to favored firms.

You can read the whole story here…

Bailout funds being spent in ways Congress never foresaw

Published in: on November 2, 2008 at 12:19  Leave a Comment  
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