Emergency Bailout

NEW YORK (CNNMoney.com) -- Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke stepped up their campaign for a $700 billion bailout of the nation's financial systems, saying immediate action is needed for the health of the U.S. economy.

Paulson, in prepared testimony he is set to give at 9:30 a.m. ET, will tell the Senate Banking committee that passage of the bailout was necessary "in order to avoid a continuing series of financial institution failures and frozen credit markets that threaten American families' financial well-being, the viability of businesses both small and large, and the very health of our economy."

"Action by the Congress is urgently required to stabilize the situation and avert what otherwise could be very serious consequences for our financial markets and for our economy," Bernanke said.

The Bush administration first announced its bailout plan five days ago. The proposals being debated would amount to the most sweeping economic intervention by the government since the Great Depression.

The July 25 RTR08 post entitled "Mother of All Bailouts" reported that the feel good legislation to 'help' those hurt in the mortgage crisis - proposed by and passed with overwhelming Democrat support - contained in it's 600 pages a provision to raise the Federal Debt Ceiling by $800 BILLION dollars. So what has happened since? The Fed and Treasury has nationalized several firms to the tune of 'up to' $200 Billion. Now today, they are asking for $700 Billion.

Six Observations:

1. The media failed to report the raising of the debt ceiling back in July and has yet to 'connect the dots' of that legislation to this action.

2. Offer any government or quasi-gov't agency $800 Billion and it WILL get spent.

3. Our economy is teetering dangerously close to disaster. Auto companies and airlines can fail - but when 'financial institutions' fail it creates panic. Panic leads to irrational reactions.

4. The nationalization of the largest financial institutions in the country makes the USA pretty much like Venezuela.

5. The USA does not have the social or moral cohesion of the Great Depression era. "God help us" if the nation experiences another depression like time.

6. And of course I have to say it, my man Ron Paul 'told you so' and tried his best to get the debate to address the gathering storm. But no. Neither the candidates nor the media celeb anchors wanted to concentrate on anything more significant than which candidate liked Reagan more. They must be bothered that this crisis is taking them off their current obsession with lipstick.