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More On The Fort Hood Jihadist
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Simply Incapable of Telling The Truth
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Study says 2,200 uninsured veterans died in 2008 due to lack of health insurance.
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Clock Tender- Extending the Life of Collector Car Clocks
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Kimberly requests information on living in Columbus, Ohio.
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Personal Rant – Why People Do Not Live in Northeast Ohio
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Video: 'Modern Warfare 2' hits the streets
Former Fed chairman would expand powers to shield taxpayer losses
By Jeannine Aversa
Associated Press
Published on Sunday, Sep 07, 2008
WASHINGTON: Troubled by the Bear Stearns debacle, former Federal Reserve Chairman Alan Greenspan is advocating a new way of dealing with government bailouts of companies whose sudden collapse could wreak havoc on the country's economic and financial stability.
Greenspan says Congress needs to give the government new powers to handle troubled companies to minimize potential losses to American taxpayers. A self-described libertarian Republican, Greenspan has a reputation for being wary of giving the government extra powers. However, in a crisis, there needs to be a clear process for handling bailouts, rather than depending on the Fed to do so, he said.
A high-level panel of financial officials should be given broad authority to quickly determine whether a failing company poses a sufficient threat to the entire U.S. economy, he recommends. If so, the company would be shut down.
''We need laws that specify and limit the conditions for bailouts,'' Greenspan wrote in a new epilogue to the paperback edition of his memoir, The Age of Turbulence: Adventures in a New World. (The paperback will be released Tuesday; the hard cover came out last year.)
Greenspan envisions the formation of a group akin to the Resolution Trust Corp. to step in, take a troubled company into conservatorship, wipe out the equity, impose some charge or ''haircut'' on its debts before guaranteeing them and then selling its assets.
The RTC was created in 1989 to deal with the aftermath of the savings and loan crisis. It disposed of the assets of failed savings and loans and then went out of business.
Critics in Congress, in academia and elsewhere worry that the Fed's financial backing in March for JPMorgan Chase & Co.'s takeover of Bear Stearns Cos. puts taxpayers on the hook for billions of dollars of potential losses. They also say it encourages financial recklessness.
WASHINGTON: Troubled by the Bear Stearns debacle, former Federal Reserve Chairman Alan Greenspan is advocating a new way of dealing with government bailouts of companies whose sudden collapse could wreak havoc on the country's economic and financial stability.
Get the full article here.
