The US Treasury is proposing a fund worth up to $700bn (£382bn) to buy back much of the bad debt held by banks and other financial institutions.
The fund would aim to sell off these mortgage-related debts in the future. The US treasury, however is prepared only to buy bad debt from international banks largely involved in the United States. Some members of Congress have negative feelings towards the bail out plan. They are not too sure about the tax payers taking on the responsibility for paying billions of dollars towards bad debt. However, President Bush has argued that this plan is better for the public than the alternative of job losses and diminished pensions.
6 comments:
Why should big, spoiled, unwieldly companies get bailed out by the government while small businesses suffer (and pay billions fo dollars for it in the end?)I feel that America has a twisted love affair with these mega companies, and we have let them think (and its true) that we can't live without them. This has an adverse effect of making them behave in ways we dont want, specifically they behave like they have no hard budget concerns because the government will bail them out if anytyhing goes wrong. I think that this buyout really goes against the basic principles of market economy that the US adheres to, but its better than the alternative.
I think what the U.S government tries to do is good for the U.S. economy though people are worried about wasting of their taxes.
If the government did not step in and let things happen as the market economy leads, Goldman Saks, Morgan Stanley, and AIG would have fallen down, which would have led hundreds of small banks and financial institutions' fall as well, as domino effect. Why would this a problem? Finance is a heart of economy. The flow of capital is need for economy to function. And the finance is what makes capital flows. It finance fall down, economy would stike unprecedented great depression.
all i can say is that this is selective socialism..
and for some reason, i really do support it..
I think what the U.S government tries to do is good for the U.S. economy though people are worried about wasting of their taxes.
If the government did not step in and let things happen as the market economy leads, Goldman Saks, Morgan Stanley, and AIG would have fallen down, which would have led hundreds of small banks and financial institutions' fall as well, as domino effect. Why would this a problem? Finance is a heart of economy. The flow of capital is need for economy to function. And the finance is what makes capital flows. It finance fall down, economy would stike unprecedented great depression.
I think that the U.S treasury doesnt really have much of a choice in this matter. If they dont help the failing financial market and allow these companies to fail, there would be a worldwide financial meltdown. We depend on these banks to keep our financial system stable. Leaving them to go bankrupt would have a huge impact on growth and unemployment. We may see higher taxes as a result, but this is a far better option than losing your job. The government needs to step in and set some rule. One of the main problems is to much deregulation and to many greedy wall street investors.
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