Also in this playlist...
This transcript is automatically generated
A bailout for Bear Stearns the seizure of Fannie Mae and Freddie Mac the recent rescue of AIG eight.
How much is it costing the US taxpayers can we afford should wait.
Do something much bigger to rescue.
This housing market and this economy joining us -- senator Judd Gregg.
He's from New Hampshire is the top Republican on the Senate Budget Committee senator thank you so much for being here.
Would you Famer we've we've talked about earlier this -- good -- -- would you favor a Resolution Trust Corp.
To buy up distressed assets here put -- floor.
In this credit crisis.
I certainly think it needs to be looked at I'm not sure the RTC really the name of that -- -- -- New Hampshire and went through this crisis in the late eighties and the RTC did come in I'm not sure that's exactly and believe me.
How about we should take a look at it the government has the has other flexible approaches in my opinion but.
Clearly the mortgage backed securities are the problem here and they have been the problem and in fact when we did the first stimulus package I suggest that rather than dumping them.
-- 160 billion dollars out of airplanes and having the money -- in China by new TVs we should have done.
Should -- -- it on stabilizing credit markets and especially in the mortgage credit market.
Senator why weren't people listing view why why are in your brother and in congress listening to you and where was everybody.
When all that loose lending was going on and everyone had a neighbor or friend who was getting a mortgage you shouldn't have gotten one.
Well first up for a market economy people always.
Markets tend to be robust and they tend to overreact they go too far and for a long time we had basically very easy credit in this country I was.
Basically not expensive at all -- -- credit and there was radical expansion of it and then that credit.
The underwriting that credit was not well done clearly people were lending money on assets which the value wasn't there -- -- the people -- support the death.
And that's all come down on top of us -- we've got a huge amount of credit.
-- bad -- has to be worked on the economy.
In doing that we need to do in an orderly way and clearly the government has played a role in trying to make -- normally through the -- and being a situation now the AIG situation.
And we may have to play further world.
But if the government couldn't manage -- and avoid the crisis then why can the folks.
In Washington and manage a Fannie Mae or Freddie Mac and an AIG.
To begin with the government shouldn't be managing the marketplace if you can avoid it in the marketplace that.
What we have here however -- a situation where the government is sort of the the last resort to to turn to here because we're the only one who the confidence of the marketplace because we have the -- -- and -- the American taxpayer behind us and so.
We could not operating -- -- maybe go under or become totally destabilize the would have taken entire.
Nation down -- it from an economic standpoint five million dollars of debt so we had come in stabilize that -- -- people -- any big enough.
It's going to do that is federal government.
The same -- AIG.
This systemic failure would have been huge now there are institutions which -- may well fail in the near future that.
The government should not step in and and bail out or in any way.
Allow anything other than that to happen in the marketplace take -- usual.
Course I think I did the senators though.
Why you don't see any more bailouts and shouldn't the government out bail out and then we have Lehman Brothers but who else.
Well I think you got to.
Candidate and he divide days and he's in the two categories.
The first and these which have such a huge pervasive effect on the entire system that if they fail they take the system -- -- that's Freddie Fannie.
And AIG and then the other and -- which.
Their loss is going to be significant and -- -- certainly employees it's overwhelming into the investors it's his dramatic but it's not going to take the system down and and right now I don't see on the horizon a major -- the AIG Freddie Fannie situation however.
That does not mean the government should not be looking at coming in stabilizing the markets generally.
Through trying to get some floor underneath the value -- real estate.
Lending in this country so the real estate so they get we get some liquidity in the real estate market so that's why -- RTC or some other.
Activity that would -- real estate.
Funds would be might be addressed.
Senator Gregg vertigo so Brian -- -- thanks for joining us listen since they pose no systemic -- as other and maybe then the Detroit and Michigan economies sounds like you're saying they'll be no federal money for GM Ford or Chrysler.
Well -- controlled.
The process here that's absolutely right -- shouldn't be but what we're dealing with here is a political climate there's a lot of key votes in those states both the presidential election and here on the -- here in the senate than in the house and there's obviously a major push by those businesses to try to get federal into the federal taxpayers' pockets how close it.
And senator I'm wondering they're going to be successful one last very quick saying how much so far.
Is all that's gonna cost just adds if Fannie Mae Freddie Mac Bear Stearns and what can we afford it in the long run.
Well to begin whether it's like that they -- -- pay me later situation we didn't take the action we took the later payment would have been catastrophic.
Well the federal government and for main street America where jobs -- -- banks that fail.
How much is gonna cost as we have no idea to be very honest Freddie and Fannie could cost a lot.
I don't think AIG's going to cost a lot I suspect we'll get most of that value back on the investment we've made there.
But there's no question is a fair amount of tax dollars at risk here and it's necessary to put an interest in order try to stabilize -- market.
Senator our great of you to join us senator Judd brag.
Thank you take care comebacks and place are okay.
Filter by section