Jan. 28, 2010 — -- ABCNews.com asked Paul O'Neill, former Treasury Secretary for President George W. Bush, how he felt about the president's job proposals and his first State of the Union Address. Here's what he had to say.
I don't think it is possible to have a useful opinion about what the President said without more facts. He did not ascribe any level of specific job growth to his announced interventions, for example, the proposal to provide $30 billion to community banks to give credit to small businesses. I don't know what this means. How will we be able to see and measure incremental credit availability to small businesses?
How much credit availability currently exists for small businesses? Are there credit worthy businesses that are being turned down? Credit worthy means there is a high probability the borrower will pay back the loan in the agreed time with the agreed interest payment. How will the community banks be selected to receive the incremental money? How long will it take to get this money into the system? Since we are in a deep deficit hole this is more borrowed money.
The President implied this was available money because the banks had paid it back … This is an accounting fiction … I hope the President knows better than what he inferred … and so on.
… I believe the greatest financial reform and combined consumer protection step would be to require every home mortgage to have a 20 percent equity down payment and to mandate that the 20% be kept in a reserve account; and parallel requirements for all financial transactions. These two steps would be far more useful than the 1000 page bill they have cobbled together in the Congress.