Originally, the $700 billion bailout package was picthed as a way to remove toxic assets from the financial system so that credit would flow freely once again. That idea was scrapped shortly after Paulson and Bernanke got their money. Now, the Fed Chairman is making the case for Congress to allocate the second $350 billion authorized in the bailout package, and the Washington Post reports:
Among other steps, Federal Reserve Chairman Ben Bernanke and vice chairman Donald L. Kohn suggested taking troubled assets off the books of banks — a strategy that Fed officials backed before it was abandoned months ago — and also using some of the money to help homeowners at risk of foreclosure.
