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Sunday, March 29, 2009

Treasury Secretary - Buying Bad Debt is Critical

WASHINGTON -- Treasury Secretary Timothy Geithner has a message for Americans worried about the economy: Be optimistic about the future of this country.

Geithner was making his first appearances on the Sunday talk shows to promote the Obama administration's efforts to revive the ailing economy and get more control over the financial sector.
He said his plan to buy up those bad assets on banks' balance sheets is critical. The goal is to clear away those bad assets and make sure banks have the capital to get back to making loans to businesses and people.

The treasury secretary said the most important thing he has learned in trying to fix the economy is that it isn't the risk that the government does too much but that it does too little to try to help solve the financial problems.

Geithner said the financial markets cannot not solve all those problems -- it's up to the federal government to act and that's what he says the Obama administration is trying to do.

He defended the public-private partnership plan to purchase banks' toxic assets as the best way to minimize the risk of losses for taxpayers.

Geithner spoke on ABC's "This Week." He also is appearing on NBC's "Meet the Press." - FOX News

What is a toxic loan? It is a loan that they made that someone has defaulted on and now the bank is out the money or stands to lose a great deal on that loan.

So we the taxpayers are going to buy those loans off of them so they can then go out and make more loans? That sounds to me like we are telling them, "don't worry about running a bad business and making bad loans, we will back you if you if it happens again."

Quit helping them.

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