Remember those tounge-twisters we loved as kids? Say this a few times quickly: “buku billion bucks buys bad bank books in bailout billiards”. Or perhaps a more appropriate gaming analogy is the Treasury Department going “all-in” in a $700 billion Texas Hold ‘Em poker bet. All kidding aside, either way, it’s a scary proposition for all of us. What does it mean?

This massive $700 billion bill is currently in negotiation through Congress to give the U.S. government the authority to buy bad mortgages off the books of Wall Street firms. Analysts are calling it the ‘mother of all bailouts’ and the ‘biggest bailout in the history of mankind.’ Economist Lawrence Yun, chief economist for the National Association of Realtors, editorialized recently that:

Treasury intervention will help restore the proper valuation of these illiquid assets. However, Treasury should not reward the mistakes of Wall Street by bailing out at an unreasonably high price and handing out “free money.” Buying at a deeply discounted price could potentially lead to huge revenue benefits for Treasury on the behalf of taxpayers once the housing market and mortgage debt valuation recovers, but the financial firms may be unwilling to sell at unreasonably low prices. If this happens, we are back to square one. Subsequently, a delicate balance must be pursued with the goal of helping unclog the financial pipeline, but also protecting taxpayers’ money.

Understandably, there will be anger and outcries from the Main Street public of this massive Wall Street ‘bailout.’ Politicians will feel the heat in this election year. But those same politicians have no choice: if the bill does not pass, the acute financial pain will quickly trickle down to Main Street.

As a resident of Main Street, I am most certainly concerned about the impact this will have on my life. The bailout plan that is currently under debate is an important step in allowing the global financial system to recapitalize itself. Even legendary intellectual titans Warren Buffett and Bill Gross, as well as both presidential candidates, agree that the Bailout Plan needs to be passed and will ultimately benefit Main Street.

All taxpayers deserve to benefit from a deal soundly rooted in free-market principles. We encourage you to communicate to those who represent you in the House and Senate and demand that the approved deal include provisions for equity ownership. Go to www.house.gov and www.senate.gov in order find contact information for your elected representatives, and give them your view.

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