Paulson Threatened Great Depression, Food Riots To Get Bailout Bill Passed
More information concerning ex-Goldman Sachs CEO's blackmail of Congress revealed

More information has come to light regarding former Treasury Secretary Henry Paulson's threats to Congress last fall that martial law would ensue unless they passed the bailout bill.

During Paulson's first appearance on Capitol Hill since he left office yesterday, the former CEO of Goldman Sachs said he told Congress privately that if they rejected the bailout bill another great depression would ensue, that there would be a breakdown in law and order as well as food riots and civil unrest, adding that he couldn't reveal such things publicly for fear that the situation would "terrify the American people and lead to an even bigger problem".

The threat of martial law was subsequently proven to be made on a fraudulent pretext because Paulson's justification - that the money was needed to buy up toxic debt - was abandoned almost immediately and the money was directly injected into banks - and even forced upon financial institutions who tried to reject TARP funds.

The fact that the entire purpose of the bailout was switched as soon as it was approved by Congress proves that Paulson's threat was nothing less than financial terrorism and a successful effort to blackmail Congress with hastily manufactured doomsday scenarios.

"The Bush administration and Congress discussed the possibility of a breakdown in law and order and the logistics of feeding US citizens if commerce and banking collapsed as a result of last autumn's financial panic, it was disclosed yesterday," reports the London Independent today.

"Paul Kanjorski, a Pennsylvania Democrat, asked Mr Paulson to reveal details of officials' concerns, which were relayed to Congress in hasty conference calls last year." "The calls included discussion of law and order and whether it would be possible to feed the American people, and for how long, according to Mr Kanjorski."

"In a world where information can flow, money can move with the speed of light electronically, I looked at the ripple effect, and looked at when a financial system fails, a whole country's economic system can fail," Mr Paulson said. "I believe we could have gone back to the sorts of situations we saw in the Depression. I try not to use hyperbole. It's impossible to prove now since it didn't happen."

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As we reported at the time, on October 2, Democratic Congressman Brad Sherman gave a stunning speech on the House floor during which he decried the fact that, “Many of us were told in private conversations that if we voted against this bill on Monday that the sky would fall, the market would drop two or three thousand points the first day, another couple of thousand the second day, and a few members were even told that there would be martial law in America if we voted no.”

A few days before, Rep. Michael Burgess also told the House, “Mr. Speaker I understand we are under Martial Law as declared by the speaker last night,” referring to a temporary suspension of the rules and procedures of Congress by its leaders so that a bill can be passed quickly.

The origin of the threat was later revealed by Senator James Inhofe to have been Treasury Secretary Henry Paulson.

Asked by KFAQ radio host Pat Campbell where the threat came from regarding martial law and civil unrest, Inhofe responded, “That’s Henry Paulson,” responded Inhofe, “We had a conference call early on, it was on a Friday I think – a week and half before the vote on Oct. 1. So it would have been the middle … what was it – the 19th of September, we had a conference call. In this conference call – and I guess there’s no reason for me not to repeat what he said, but he said – he painted this picture you just described. He said, ‘This is serious. This is the most serious thing that we faced.’”

Inhofe said that Paulson told members of Congress the crisis would be “far worse than the great depression” if Congress didn’t authorize the bill to buy out toxic debt, a proposal “which he abandoned the day after he got the money,” added Inhofe.

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