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brk[_2_]
March 25th 09, 06:35 AM
Geithner Plan Will Rob US Taxpayers: Stiglitz

Reuters
Tuesday, March 24, 2009

The U.S. government plan to rid banks of toxic assets will
rob American taxpayers by exposing them to too much risk and
is unlikely to work as long as the economy remains weak,
Nobel Prize-winning economist Joseph Stiglitz said on
Tuesday.

"The Geithner plan is very badly flawed," Stiglitz told
Reuters in an interview during a Credit Suisse Asian
Investment Conference in Hong Kong.

U.S. Treasury Secretary Timothy Geithner's plan to wipe up
to US$1 trillion in bad debt off banks' balance sheets,
unveiled on Monday, offered "perverse incentives", Stiglitz
said.

The U.S. government is basically using the taxpayer to
guarantee against downside risk on the value of these
assets, while giving the upside, or potential profits, to
private investors, he said.

"Quite frankly, this amounts to robbery of the American
people. I don't think it's going to work because I think
there'll be a lot of anger about putting the losses so much
on the shoulder of the American taxpayer."