President Bush gave a speech tonight trying to tell the people why Congress should “[commit] so much of the taxpayers’ hard-earned money” to purchase “the troubled assets, including mortgage-backed securities, now clogging the financial system.”  (Read the transcript here.)

Never mind how we  got into this mess — the short answer is the socialism of the 1930’s New Deal, which created Fannie Mae.  Now we need to look at the proposed solution.  This is the gist of it:

First, the plan is big enough to solve a serious problem. Under our proposal, the federal government would put up to $700 billion taxpayer dollars on the line to purchase troubled assets that are clogging the financial system.

In the short term, this will free up banks to resume the flow of credit to American families and businesses, and this will help our economy grow.

Second, as markets have lost confidence in mortgage-backed securities, their prices have dropped sharply, yet the value of many of these assets will likely be higher than their current price, because the vast majority of Americans will ultimately pay off their mortgages.

The government is the one institution with the patience and resources to buy these assets at their current low prices and hold them until markets return to normal.

Does anyone see the flaw in the plan?  What “taxpayer dollars”?  What “resources”?  We are now nearly 1.0e13 dollars in debt.  Where will the 7.0e9 dollars come from?  You guessed it — more debt.  So if these “troubled assets” were such a good deal, people would buy them instead of the bonds the government must sell to buy these “assets.”

The problem created by socialism, we’re going to fix with socialism.

The word BOHICA comes to mind.