Freedom from Blog

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Wednesday, September 17, 2008

Insurer of Last Resort

I don't have anything terribly substantive to say about the AIG bailout . . . but isn't it interesting that the Government can do this sort of thing without a statute? My understanding is that the Chrysler loan in the 1980s required a statute. Talk about the expansion of presidential power.

What is Congress for, anyway?


At 10:03 PM, Blogger Paul said...

In the last few days my daughter's diapers sure have come in handy for the entire family...

At 10:10 PM, Blogger Frances said...

This AIG bailout really does highlight the total eclipse of the legislative branch. Congress noodles over legislation providing a million here and a million there, while the real decisions of war and peace and high stakes finance are made by the executive branch. In the current case, by people elected by no one.

I really would like to have a better understanding of the legal authorities involved. Can the Fed really buy any kind of business and then turn around and replace its management? If so, what does that mean for Congress's power of the purse?

We teach in Intro to American Government that federal dollars can't be spent without congressional authorization, but if the Fed has a standing authorization to spend whatever it wants for any purpose, how is Congress even relevant anymore?

Look on the bright side: The Fed, I guess, could decide to nationalize the entire private health insurance industry. It could just buy up a majority stake in all the corporations and then put them all out of business. And I guess it wouldn't even need legislation to do so!


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