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Sen. Dodd Proposes Giving U.S. Equity Stake for Bad Debt

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posted on Sep, 22 2008 @ 12:20 PM
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Sen. Dodd Proposes Giving U.S. Equity Stake for Bad Debt


www.bloomberg.com

Senate Banking Committee Chairman Chris Dodd offered an alternative today to the Bush administration's financial rescue plan aimed at giving the U.S. Treasury an equity stake when it helps companies burdened by debt. ``We cannot just turn over $700 billion in taxpayer money and not insist that that taxpayer is going to be protected in this,'' Dodd told reporters yesterday.

The legislation requires Treasury to take an equity stake equal to the purchase price of the assets being bought. If the company isn't publicly traded, the government would take senior debt instead, placing it in the front of the line of debt holders for repayment in the event of a bankruptcy.
(visit the link for the full news article)




posted on Sep, 22 2008 @ 12:20 PM
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I have mixed feelings on this, it makes the gov't a partial owner of these companies, but also the gov't shouldn't be shouldering all the debt from profligate investors and be left holding the proverbial bag without some stake in offsetting this burden to the taxpayer.

So on balance, make them pay, and hold them accountable. I doubt, though, this bill will fly. Even in bankruptcy, these fatcats will not want to pay, and their political apologists will see no reason to make them.

www.bloomberg.com
(visit the link for the full news article)



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