Andrew Jakabovics on the Troubled Asset Relief Program

Last Tuesday Secretary of the Treasury Henry Paulson, "Hank" as he's known, came out with a revised version of the TARP, that $700 billion bailout program of which the government has now spent close to 300 of the first $350 billion allocated to them.

Now, TARP stands for Trouble Assets Relief Program, and what was very clear from his statements last week was that he's no longer interested in buying up those troubled assets, those mortgage-backed securities that everybody realizes really lie at the heart of the current financial crisis. And instead, he wants to use the remaining monies alloted to him for insuring credit card loans, auto loans, and student debt.

Now, those are all wonderful and worthwhile things, but the truth is, they're really secondary to what the core of the crisis happens to be. So instead of focusing on these mortgage-backed securities, helping homeowners and buying out those bad mortgages so they can be restructured, he wants to basically finance the recovery on the backs of consumers, which is not really a long-term sustainable solution.

Instead, what we've long been proposing, and what president-elect Obama has indicated he believes the focus should be once he takes office in January, is to really focus on those mortgages that are in trouble, at risk of default, leading to foreclosure, buy them up, restructure them so they can be sustained, so people will be able to stay in their homes, and then ultimately the economy will recover as those bad assets also get pulled out of Wall Street and get replaced with better securities.