It's happening right now. The US government is taking on nearly a trillion dollars of private debt into the public realm. I know what's coming:
"We're in massive debt! Privatize social security! Privatize the last of the education systems! Cut! Slash! Begone any attempts to provide socialized medicine."
If you read Paulson's proposed legislation (it's an easy read and only 3 pages long) you'll realize that it's actually much worse than that. The proposed conduit is limited to holding $700B
at any one time but those assets can be sold off (at a huge loss no doubt) and then they can buy more toxic waste again and again and again. There is no limit to how much bad debt the US Treasury can take on under this plan!
If you want to get an idea how much debt Paulson expects to stick the US taxpayers with look at the section where they raise the legal debt ceiling for US government borrowings. The current debt ceiling is about $9 trillion. The proposed new ceiling is over $11.3 trillion. This supposed $700 billion bailout is actually going to cost $2+ trillion.
This is the greatest pump-and-dump in history and hardly anyone even comprehends what's going on. This isn't just big, this is super mega ultra ginormous.
If this plan goes through then holding US $ denominated assets is going to become very risky.