Giving all control to Paulson:

From the proposal: (emp add)

The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States. ...

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

"mortgage-related assets" means derivatives, many which are completely worthless.

A hint of the money involved:

The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time.

And

Sec. 10. Increase in Statutory Limit on the Public Debt.

Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.

The "taxpayer" won't be footing this, at least not in the near term. It will be paid through an increase in the debt (which requires foreign purchases of U.S. bonds). In subsequent years, that increased debt will make it harder to pay for lots of programs (education, health care, energy programs, infrastructure, etc).

It's not just residential:

Mortgage-Related Assets.--The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.

posted by Quiddity at 9/20/2008 09:17:00 AM