Critics: Bernanke-Paulson Plan Isn't the Only Option

Opponents say there are other ways to save Wall Street from itself
By Jim O'Neill,  Newser User
Posted Sep 24, 2008 9:29 AM CDT
Treasury Secretary Henry Paulson testifies on Capitol Hill in Washington, Tuesday, Sept. 23, 2008, before the Senate Banking Committee.    (AP Photo/Charles Dharapak)
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(Newser) – The Bush administration’s $700-billion bailout isn’t the only option available to help Wall Street, and critics say alternatives that limit taxpayer liability have been too quickly abandoned for the sake of quick action, reports the Washington Post. "They presented this as a comprehensive, decisive solution, but it's clearly not comprehensive and probably not decisive," says one plan critic. Among the options being floated:

  • Have banks put up their portfolios as collateral for federal loans.
  • Establish a $700-billion “federal hedge fund” that would infuse cash into the system by buying sound investments, not bad debts.
  • Extend help to distressed homeowners by buying mortgage-backed securities and restructuring the loans they’re made up of.
  • Repeal the capital gains tax for 2 years, helping to stimulate investing.