I agree the bailout pack will not fix the problem, it will only postpone it meanwhile a few will arrange to limit or pass others their losses.

Hope no, but feel possible a meltdown due to lost in trust of the banks / politicians / big industryand state autority .

A lost of trust in the high society, the so called aristocracy at ancient Greece times.

The many poor have lent their money to those "caste" to allow their high rich living standard.

A large part of he rent money have been wasted and is not clear if and how it will return to the original owners.

The interesting question is: why were all these intelligent people inventing these wonderful new and sophisticated financial products so wrong? The answer is: they forgot the point made by Knight, (Knight, F.H. 1921 Risk, Uncertainty and Profit, Boston, Houghton Mifflin). Knight explains that uncertainty can not be reduced to mathematical calculation of risk. There is something called real uncertainty, which is the reality outside the mathematical models. Real uncertainty is caused by factors we do not know or exclude when we construct the model, such as in this case falling house prices. Real uncertainty cannot be calculated. One way of relating to real uncertainty is through the precautionary prinicple. The short story is: take care, do not position yourself in a spot where something terrible you do not yet know may happen to you. It is a simple wisdom, but easy to forget.

I believe that the bail.out package is a necesary step in the right direction, but it is not enough. The package will not restor the system back to pre-crisis times. The events leading to this financial crisis shows the importance of government-close-controls and supervision. The complexity of modern day financial systems necessitates the appreance of new economic theories. It is these time-crisis-situations that creates the suitable environment for the suggestion and acceptance of new theories in macro-economic management.

I have been following the debate on the business crisis in the US and its effect that it has on the world economy.I am not in the remotest of way connected with the financial world,but I cannot still understand the bail out reching a massive $700billion US.It is, as most boggers would say a bailout of rich people who already have a lot of money and would not be hurt if they lost a little, they still would have a roof over their heads, food on their table for themselves and their families,instead of this bailout of these private corporations by labeling it in the all important term which seems to follow anything and everthing done by the US politicians of being" in the interest of american peolple"-by the taxpayer, why doesnt the govt,invest in the future of "human potential" imagine if they gave away this money by making college education which happens to be so very expensive and sought after by all concerned and many not getting a shot at this only due to economic reasons, of rolling out more college educated and better professionals in every feild faster then they would normally do, of investing in health care for all, no ameriecan would then go to any hospital without the requiste insurance which would pay for this?If you divide the population of adult amriecans by that amount look what you would give every family to work with, I am sure the money thus invested in the "human potential"of its citizens would bring massive returns in all respect to its nation, and america has the money to do this.

I'm surprised noone has looked to the consequences of printing $700 billion for the banks. Divide it by the current reserve ratio set by the Fed, and you'll get the tally on how much M1 is about to jump. Once this money trickles through the system we'll see inflation rise, and the american family struggle even more.

I disagree with the bailout. Japan tried bailing out their banks and it prolonged their economic woes for over a decade. Let these fail and learn from their poor decisions. Subsidies for banks and poor speculation is what this amounts to.

Why aren't out representatives listening? Why are articles that get down to the real problem, such as this one not thrust into the mainstream media like all the "Dooms day" "Must pass now!" ones.

When will this government ever get back to serving it's people?

What happens to an economy when 700 Billion dollars in funny money is printed and inserted? Why isn't ANYONE talking about this cause and effect?

Why isn't anyone talking about how gas prices have played a role in our pending economic situation?

Why isn't anyone talking about the many things that really lead to this "crisis" that we are in?

I will make the following statement.

I will NOT vote for anyone, whom votes FOR this measure. There will be no exceptions to my decision. ANY "bailout" plan for business is "stupid", like most things that "the decider" has chosen to do during his reign of power and tyranny.

The Busch Cheney Fear Factor "Bailed Out" Edition needs to stop, now! Please LISTEN TO THOSE WHOM ELECTED YOU!

I agree with Jackson against the bailout plan; to address and tackle the problem you need to go beyond the immediate crisis and that calls for attention to the root cause rather than either the symptoms or the ailment.

The US will need to pay attention to regaining the confidence of its citizens; credibility needs to be re-established. This can only happen by re-visiting the policies that govern the economic lanscape; policies that have in fact been inherited to guarantee promising lifestyles for both high and low classes of the society.

Jackson proposes:

"Imposing a national, short-term freeze or moratorium on all foreclosures of owner-occupied primary residences

Granting bankruptcy judges authority to modify mortgages on primary residences

Establishing a program and procedures allowing restructuring of sub-prime loans under affordable, fixed-rate terms

These fair and modest steps will protect middle-class homeowners and stabilize the housing industry. The housing market must be secured if we expect to resolve the crisis and strengthen the economy" (& I would say stabilize).

Increase of living costs, taxes or any form, will only raise frustrations and will extend the crisis beyond the current situation. I suppose by addressing the housing industry within the global scene, (possibly a scale; loans against average annual income against a housing index per square meters to be shared in the aftermath to demonstrate transparency and restore credibility). There can be more insight prior to drawing a stable policy for the benefit of the US and possibly other nations.

The problem with the bailout program is that it does not confront the fundamental problem that is faced. The purported purpose was to set up a RTC type function to deal with the foreclosure issue. It has been turned into a rescue plan to bailout toxic paper. Until someone in a position of leadership addresses the fundamental issue of a staggering foreclosure rate with an attempt to stop it will not be solved. I could suggest a point-by-point plan that would meet much opposition but may work.
1. Freeze foreclosures
2. Instruct borrowers that they must continue to pay their mortgage effective immediately at the original mortgage rate they were given. (Current past due mortgage payments have to be set-aside for now and addressed later).
3. Have banks identify who the troubled borrowers are with their original application paperwork (i.e. appraisals, income qualification and credit scores).
4. Have the borrowers apply with their current income qualifications and credit scores. Have HUD perform a new appraisal.
5. HUD restructures the borrowers mortgage and it goes into the RTC like account and insured by HUD.
6. The difference between the banks initial valuation and mortgage will then have to be written as a loss to the bank.
7. At this point the bank can ask for a government backed loan to cover the period of time determined to be needed to absorb their losses.
8. In return for their participation in the program they have to continue to provide mortgage loans under newer conservative guidelines that everyone agrees were previously ignored.

There are going to people who will get more than they deserve and there will be people who will have been lost through the cracks. Furthermore the rest of us will have to participate in helping our fellow citizens out of a problem many of us believe should have never happened; however, when you are in a sinking boat everyone has to participate in bailing water, not just those who put the hole in the hull. The plan above would call for a lot of leadership by people who will have to set aside their own self-interest for the interest of this country and their neighbors in the world. This country is no longer an island and it must concern itself with its own interest in the context of how it affects the rest of the world. If someone doesn't stand up quickly and lead us down the correct path, there is always someone willing to lead based on the irrational fears of the masses.

In the interest of full disclosure I am a real estate appraiser by profession. Any response would be appreciated.

I do not believe the new and improved bail out will help the economy. We are already tightening our belts and purse strings. Congress keeps telling us this bail out will allow people to get credit and loans for cars, education, homes and what nots. Has anyone given congress a reality check. Tonight, the house of reps will vote and the senate is very certain they will vote for this bail out. Is anyone listening or paying attention to us? Neither presidential candidates has spoken directly to those of us who oppose this bail out. All we hear is how it will allow people and small job owners to get loans...... I agree to the $250,000 increase of the banking insurance rate but I greatly disagree to the $850,000,000,000 bail out.

I wish we could send a stronger message to congress. Unfortunately, the wish may be to have the poorest holiday season ever. No Virginia there is no Santa Claus.... We can't afford to buy gifts, we can barely afford groceries and gas and fuel cost for homes is going up. Maybe all of us should send our senators thank you cards with our bills attached. Maybe, then they will throw some of that money, which has miraculously appeared, our way.

I do not expect the Bail-Out Plan would deliver its full objectives. Instead it would deliver a limited amount of security that is needed by Financial Markets at this moment. The impact was empowered by the Housing Crisis which highlights that Ordinary People are having Financial Constraints and they suffer with the Increase in Finance Costs coupled together.

If another Credit Card Crisis occurs should the American Government deliver another Bail-Out Package to its People???

The objective is to maintain a positive and working "Cash / Credit Ratio" between the General Public and the People would directly get the benefits of any sort of package. The Authorities should come out with the more relevant levels of the Ratio, which positively contributes towards the Economy and the Lives of People as well. IF NOT, no plan would be successful.

Shameer
from
Sri Lanka

I completely agree with you that the real problem is more deep and difficult to solve. The problem is the large credit expansion that stimulated consumption beyond the limits of a healthy economy.

The idea of package is not bad but as far I can see the technical solution is not good. The Government have to save the bank system not the banks and their shareholders. Instead of buying “toxic assets” they should buy shares of the banks. Those shares could be sold again when the situation stabilizes.

I think that a recession is inevitable and perhaps it is the only real solution for this situation.

Everybody seems to blame the banks, but what about the citizens who borrowed too much, voted for tax cuts that increased the national debt, and voted for expensive wars. You voted for freewheeling capitalism, now you must pay the consequences, and whether you blame the banks or not, you will not escape.

Mirror mirror on the wall :which is the biggest sub-prime of them all ? Easy. It is the many trillions of $ the USA owes the rest of the world. Truly has it been said that the US borrows money from China to pay for the war in Iraq and war is not a remunerative investment; hence the crisis. The $700 bn bail out is only going to shift the dues from sub-prime borrwers ,like home owners, to sub-prime lenders, like China. There are others on both sides of the balance sheet and eventually the chickens will come home to roost. When China and the OPEC countries want their money back, there wont be a "bailer out" of last resort.
Chudamani Ratnam

I dont think the bailout will help. The problem boils down to 1 thing. Greed! Corporations arent happy with a small profit, it has to be bigger and bigger. Sometimes you have to cut cost to make the profit margin seem higher, so they cit jobs and outsource. I think its 1 thing Americans should learn from Mexicans and Asians...they are successful because they take care of family 1st. its not always comfortable in the beginning but it works out. Americans need to take care of home 1st. with Jobs, medical, and educational.

Why is college constantly getting more and more expensive and there is nothing more being offered?
Why is it mandatory for you to have insurance but not mandatory that insurance companies pay?

Americans dont want a social medical plan like other countries because they feel it will eat into the profits...the American system will work if the insurance companies are forced to pay..SINCE WE ARE PAYING THEM ANYWAY!!!

that all goes back to greed...but now we as tax payers are forced to help out the same people who raise your interest rate from 7% to 21% because you were late paying a different credit card.

They dont give us a break..why should we give it to them?

Here is a solution...give that money to the people and let the people use that money to pay off the house and cars and what everelse debt they have, thats sure to jump start the economy...and everybody wins.

Under the current bailout plan, only Wallstreet wins...You know what?!?!?! THE PEOPLE WILL STILL BE IN DEBT!!!

I say dont worry everything is going to be ok..we will over come any problem that comes or way just have faith. We didnt come this far to just loose it all. Its just a minor set back . Stop panic for every little thing you hear on TV or Radio and look around you we are still in the game and this problem can still be fixed. Go out their and shop buy cars spend money live your life because the people is the cause of this problem because we control the economy.

I don't think that the bail out package has to fix the "real" economy.
The aim of the package must be to restore trust in the financial system avoiding further spreading of the crisis from Wall Street to Main Street and abroad.
The market capitalistic system will not suffer from the intervention of the government. Anyone, even the market, can need the help of a "doctor" sometimes.
The effect of the crisis on the prestige of US can be heavy but it will be completely forgotten in a near future if the government and all the main actors of the financial system react promptly and adequately.

agree on all 3 counts.
feel ,however, that in the long run ,free markets,with proper checks,as democracy has its own checks, will bring wealth creation;

I would like to treat the issue the other way around: What will happen, if there is no bailout?
Isn’t it true that the impact will be even more severe on confidence in the banking system? What about multiple bankrupts of banks all over the world? You think the self regulating forces of free markets will bring us to equilibrium? May be at some point, but what is the cost of this? As I do remember, the US Treasury did this kind of calculation and come to the conclusion that the cost of doing nothing would be considerably higher than a bailout package.

Basically, we're screwed. If they do the bail out, then the people who did wrong get off easy, a half trillian dollars (must be said again: ONE HALF TRILLIAN DOLLARS) that we don't have gets spent, and the problems that led to this crisis remain. If they DON'T do the bail out, confidence in the government and the econemy continue to plummet and the problems that led to this crisis also remain.
History lesson: All civilizations everywhere eventually fall. Its the life cycle of humanity. Maybe its our turn now.

My mistake: Its actually closer to three quarters of a trillian dollars. Thats why I don't do math before coffee.

I agree with your take on the bail out.I'd add that Wall Street (to generalize) undoubtedly KNEW most of these lame mortgages agreements would falter, and counted on making a second killing by later foreclosing (mind you foreign entities who bought into this I'm certain thought the same). Clearly, no one thought the real estate bubble would burst.They wanted to put it to to average working Joe and now, through the bailout farce want to find yet another way.Government bled dry SSI and I was AMAZED they are trying to use the SSI shortages to further justify the bailout.If our elected officials are foolish enough to vote for this, we should promptly vote them out of office.As an American I am COMPLETELY DISGUSTED.Mind you, those who bought these adjustable mortgages should pay the price now.I didn't buy a house, why should I pay for someone elses?! Sorry, if you got duped, you'll be more careful the next time.Kiddies,there is no Santa Claus when it comes to money and profiteering.And one more thing,as Americans we have to stop borrowing from the world to pay for what we can't afford.Big business(while stripping down salaries from what MY blue collar grandparents made, to put in their bottomless pockets) keep selling us this idea and we have to stop buying it.I could go on, but I've made my points.

I totally disagree with the bailout. It will prolong the cirsis and help only the rich monsters. The government should stop taking care of the rich idols and turn to help the needy and the poor.

As a Kenyan and apt news reader. I think the bail out plan may work, the economy of the U.S is already in shumbles what difference will this bail out make? If it helps the current situation it won't do it in a significant way and if it doesn't then there will be no significant difference.
It look like a lose – lose situation. Americans... its time to take a huge risk... in fact a desparate measure you may have everything to lose but if this bailout bill work's you'll also have everything to gain_ atleast in the short term. Choose your leaders wisely forget about politics loojk at facts and evidence.
Coming for a country like mine (Kenya) I understand the problems that arise during a elecction year economies suffer, people suffer. So make quick decisions, don't delay because the outcome of waiting may be much worse.
I Support Barack Obama, I support the bail out bill

You are right. All the news today is about getting the altered bill through the House the second time, and which congressmen will change this time. No-one is saying that the fundamentals of the bill are wrong: its the wrong bill. The bill that should be put, and yet might be put, is the one whereby the bad loans are not shifted to government/public ownership. The people quite rightly do not want to own the bad loans. They do not want bailout. They want the buck to stop where the bad buck currently rests: with the people who took out the loans they could not afford, and the companies that made the loans.

The voice of the people is still not being heard.

America can find $700 billion for the rich and wealthy but not for the poor and starving???

The US has shown the world what happens when greed and excess are allowed to flourish as the Bush admistration has. Bush let his base have a free hand and they took it. That they ruined the economy did not matter to them. This is capitalism run amok. Just as socialism has its faults, we have now seen the dangers of capitalism. The US has tainted itself irreperably, politically, socially and economically. The individuals responsible for this misery are certainly not patriots who care about the state of their land.

This is crazy, the public should not be deprived like this. Where does the 700 B come from? reduce public spending that's where. I wouldnt mind so much if Washington were saying "Fine, we will bail you out, but we want the entire board of directors dumped and new staff appointed, before we entrust this money to you", but of course they aren't saying this.
How they can consider and get approval for this is amazing, no way should those managers be permitted to remain, they have demonstrated the ultimate in poor stewardship, insolvency.

The roots of the problem are not financial but just too much consuming of the earth natural ressources and goods produce now by countries with low wages and little social benefits for their citizens( such as China India etc...) In order for the ecomies of the world to continue their development, business in general keep inducing people worldwide to buy and buy even more consumer goods mostel by lending money to them. They then borrow and most bank induce them to borrow even if they are not in a postion to repay. Consequently the system as run out of gaz.

Why should the tax payers in US and Europe should ultimately pay for the bankers who created such complicated financial systems that most of them do not understand and could not control?

A few month ago we fear the "Peak Oil" has been reached, now I believe that the "the "Money Peak" as been reached.

In essence, people in the most affluent nations have been living beyond their means, consuming limited resources at a rate beyond that which they can be replaced. Oil, gas and coal are fundamental to any modern economy, a major increase in their price has enormous repercussions. Excessive regulation and little interest on the part of the government and private investors has stifled creativity and prevented rapid construction of alternative energy like wind and solar power. Ethanol production has far worse return than wind power, and should never have been considered as a replacement for gasoline.

Good points Michael Smith. I like your ideas. And if businesses need an operating loan at this uncertain time, perhaps the US govt could be the lender. There still are small, local banks in every community that may be willing to finance operating loans too. If this is truly a crisis of the housing collapse then direct the bailout to mortgagees. Unfortunately we will be paying for non-housing junk debt as well.
Josh – your point about high gasoline and fuel prices is important. Many of these 'bad' loans would still be good if all of us weren't paying for the oil speculators' game?

Of course the bailout package will not be "the" solution. But it will be part of a number of steps that will get things working again.

We have been here before..the current crisis is yet just another market bubble.

Hang on...happy days will be here again :)

Greg Atkinson

http://www.shareswatch.com.au/blog/

the bailout plan is a step that america needs to take to fix the financial problem, no problem is ever fixed by doing only one step, when that is done thell be other things to do, yust remember one step at a time and well get there!

I fully concur with Michael Stevens assessment. However, I would add that the corrupt Bankers and Wall Street started this trend of unethical lending so that they can get the hugh bonuses that have been dished out over the past years are held accountable. These bonus helped trigger unethical lending practices to further line up their pockets.

Find whoever is responsible and hold them accountable and make them return the money to assist the people that are most hurt by this crisis.

We have lost our ways...it is that simple.
There was a time when Banks simply received money from depositors and invested these funds prudently; when Wall st. served as a capital formation center for REAL enterprises; when venture capital served as seed money for GOOD and REAL ideas; when the casinos were where folks would squander their money hoping for a quick return; and loan sharking was practiced at the risk of perpetual damnation. Well, folks, it is all one big pile now. One can not tell what's what.

What is the answer? NO BAIL OUT.

Let the systen work. IT will rid itself of all the bad paper, of the speculators, of those that deserve to loose their ill gotten gains. At the other side of the tunnel the system will emerge clean, efficient and back to its basics. The role of Government ? Simply pick up the pieces along the way to make sure that the average citizen does not loose his life savings.

The last thing we need is hundreds of Government agents CONDUCTING the economy...GOD help us.

I think that the proposed bailout is less likely to fix the real economy than to increase the immense national debt that the American public will paying for generations to come.

Before the American people are asked to bail out the fraudulent authorities and executives responsible for the present situation, the assets of these latter should be frozen, and their crimes and the damages resulting from them made public.

In protest I have withdrawn my vote for a presidential candidate who approved the bailout yesterday.

Dear Todd,

Back in the Asian crisis in 1997 the US told us we can not bail out any of the banks and financial institutions as a precondition for being granted the IMF loan. So in Thailand 56 finance compaines and several backs went down the drain, our feeling here in Thailand is what a HYPOCRITE, you teach what you preach. We swallowed a strong concoction of medicine back then and a lot of people lost out, but now our economy is doing better.

I think this decade – and this Bush administration – has been literally a disaster of historic proportions for the US, one from which it may not recover. The US has lost a lot of its political authority in the World and encouraged the EU to start to look to take over that role in, say, the middle east, Georgia etc. This credit crunch now signals the end of laisse faire capitalism, at least for a long time, and also signals a decisive shift in economic power from the West to the Middle & Far East. The US now only has its military power left and even this is weakening. I think that the 20th century may be known as the century when the US saw its 'golden time' but it is now entering a terminal decline in World influence.

I'm reminded of my mentor's old saying that "prescription without diagnosis is malpractice" when used with consulting to businesses. I agree with Michael's offered solutions that let's focus on the problem and work to correct it.

Part of the solution is recognizing what got us there. Many of us are as guilty of "laissez faire politics" while we simultaneously point the finger at laissez faire derugulation and ask "who was watching all this take place." U.S. voters have been apathetic in monitoring and making our voices heard by our legislators. And we are now paying the price for that inattention.

The House version being voted on is laden with pork in an effort to win votes. I'm still wondering how subsidizing an arrow making company in Oregon gets to the root cause of this problem. It is symbolic of the larger issue facing us–a Congress unable to join together and tend to the needs of its citizens without a "what's in it for me and my state" mentality.

Will the bailout work? No. Why? Because what this country is lacking at all levels is an ethical and moral compass to operate by. What we're witnessing is a complete failure of trust for our fellow citizens and our "leadership" at the legislative level and executive levels. It's an issue of trust as well as entitlement.

Going to war caused this. It has cost billions, even though the people did not want it in the first place. Now we have to pay for it.

I'm not an economy buff, but even I know that this will not FIX the problem.
But it may be one of the few options we have. Many see it as a rub-on cure, when it's just a salve.
At best it will be a pillow to cushion a 10 story fall.
As a ridiculous optimist, I'd say things will eventually level out, and most people will ultimately be fine. But who's to say?

Hello,

I agree with a number of points made by Todd here, except that the so-called bail-out will work; at least to the extend to avoid the immediate bancruptcy of more banks, leading to ever tightening credit to other banks, unemployment andsoforth.
As for the US financial leadership: I guess that will go south the same way its moral leadership did under GWB governance.
Something to consider: didn't the media's coverage of the supercharged economy and their CEO superstars contribute to creating the bubble?
CEO's are no rockstars and should be treated critically.
Best regards,
Chris

Fractional Reserve Banking destroy us!

This crisis has been caused by fractional reserve banking, eg. banks abd fianciial institutions lending money out they don't have. As long as interest was paid, they thought they were alright. When people start taking their money out, all banks will eventually collapse. Let me quote by Murray N. Rothbard:

"Let's see how the fractional reserve process works, in the absence of a central bank. I set up a Rothbard Bank, and invest $1,000 of cash (whether gold or government paper does not matter here). Then I "lend out" $10,000 to someone, either for consumer spending or to invest in his business. How can I "lend out" far more than I have? Ahh, that's the magic of the "fraction" in the fractional reserve. I simply open up a checking account of $10,000 which I am happy to lend to Mr. Jones. Why does Jones borrow from me? Well, for one thing, I can charge a lower rate of interest than savers would. I don't have to save up the money myself, but simply can counterfeit it out of thin air. (In the nineteenth century, I would have been able to issue bank notes, but the Federal Reserve now monopolizes note issues.) Since demand deposits at the Rothbard Bank function as equivalent to cash, the nation's money supply has just, by magic, increased by $10,000. The inflationary, counterfeiting process is under way. "

If they succeed to bail out the banks, then only normal people will loose their money, shares and bonds. If they don't we will face the same future. We can non see why that is more fair!!

M Westerlund

Other than my 401K getting hammered I don't see the downside to this credit crunch. The country's ability to recover from 911 and the last recession was primarily due to an unprescedented building and real estate boom. Booms go to bust. The good times can't go on forever. I work for a leasing company and there's plenty of money to lend. Small business owners aren't having any trouble getting money I know because I routinely lose business to local banks. So exactly how is Wall Street bad for Main Street? The numbers on Wall Street haven't been value-based in a long time so these stock slides are inevitable. Besides the large banks and large investors who else benefits from this bailout?

One of the greatest moment of this mess was the congress decision not to support this bail crash. I think this was one of the greatest moments of amercian democracy. I hope , but I doubt, the congress will now stand on the way of the senat and Bush and the big tycoons with their medias for the second round.

I say let the ones who caused the mess bleed and help those who will really suffer from this mess, help those who are loosing their homes, workplace or cars. Do not help the criminals!

No, this bailout will not help. Your middle class is what keeps the country financially solvent. With the gas & food prices increasing at amazing bounds we have had to decide if we want to eat versus buying a new car or investing. People can't afford to pay their morgages because they need to eat or put gas in their car to get to work. They have had to draw money out of their 401K just to keep their head above war to pay for the increasing cost for electric, food & fuel. Come on people, this bailout will not get to the root of the problem which is corporate, wall street and government greed. Money will not start flowing again, because your every day Joe Blow still cannot afford to borrow money because he knows he can't afford the payments. He can,t afford to invest any of his hard earned dollars, instead he is having to draw out his and his childrens future to stay alive today. So why keep companies going alittle longer at our expense for the very same result.

Of course, there is no panacea for a market in crisis. The 700 bl or 850 bl will not solve the problems.
In any case, there will be a prolongated downward economy, even if somehow minorated with the bail ou package.
But only time will show the adjustments, and the same robber barons will be back, using the same con schemes, maybe in three to five years the same madness may occur, if regulation and due inspection do not inhibit the exagerated greed.

I completely agree that a bailout, no matter its construction, will not work. It is NOT just the banking industry that is screwed up, nor the stock market, not even the people running these institutions it is much more basic. It is the American Dream that has been dramtically altered, no that is not even true, the dream is fine, it is now the complete dream is wanted all at once and the only way that can happen is with credit. I remember when I bought my first car back in the early sixties, my father explained to me that you can buy your first car on credit, but cash for all the rest. Now it is credit for everything that is advertised on television. Do the banks scare me, no, not even the stock market but, what if, just what if Visa fails ... nobody has that much money to cover that one.

Can someone explain this to me please? These people had no clue this was coming. How is it that you think they can fix it?

Well, the bailout plan ( USD 700 bilion) is payed with money that was actually destined for other purposes. Sure, everybody says that the tax payer will pay for it, but in fact, that money was already payed before and had a destination. The tax payer pays for governamental services, like the educational system. And now we are reading that that money will not receive the destination, right? It was supposed to be used for paying schools in California, pay the salaries of all the unemployed people that are coming more and more, and maintenance of roads, police, and all other governamental services. And now it will be used to pay just a tip of the iceberg. It will even not be enough. It does not solve anything, it will just create other problems in other areas. Either way, if the plan makes it or not, I do not see any happy ending in the situation. Hope I am wrong...

The proposed financial bailout contemplates a choice between taxpayers assuming the costs of the bad decisions made by Wall Street and the government, or the threatened total collapse of government services and business should the bailout not pass. I would like to see some consideration to funding new financing for qualified borrowers, either through existing financial institutions that have maintained fiscally sound lending activities or a newly chartered entity, that injects needed capital to the markets without assuming the risk of loss in buying billions of bad debt. The offending institutions can sit on their bad paper until the market turns.

This 'bailout' is more like a bad 'amalgam' filling for a thoroughly rotten set of teeth. It will allow for a few more bites of the same unhealthy food our Markets-Casino mentality has learned to feed greedy people. But bad eating habits & poor dentistry combined will not enhance our health in any way. Greed has taken over, become all-pervasive & invasive. 'Money' itself has lost all 'value' & unbridled 'Capitalism' is much to blame. How could it be otherwise, when 'we' don't object paying millions to a relatively few adapt at kicking, chasing or catching spheres, along with others 'performing their act' in front of a mike & then those well-groomed, pin-striped 'Execs' who have conned 'us' into believing they 'know something'; i.e. how to get 'rich' while watching TV...What incentive is there now for anyone to invest 10-12 years of their lives in pursuit of academic credentials, when 'making money' is so e a s y & even if you fail, especially if you fail BIG, there's always the tax-payer....Correct?! We're about to find out just how easy it really is!!

yes,I agree the bailout won't work.The problem was created by global forces and only a coordinated global action will solve this problem.Problems of USA are intricately tied up with the other countries and their economy,so, having american centric solution will just not work.
What will be the response of other economies? will they too have thier own version of bail-out plan? They too will face this problem.Do they have resources to fight it out?I doubt and this scares me a lot.The failure of other countries,too,will get reflected on USA. Draw your own scenario,I am sure it very scarry.

The bale out is about restoring credit into the worlds wide economy and lowering those long term libor rates whether its sterling, dollar or euro whilst unwinding of market positions occurs to lessen further loseses.

There is a corollary of recapitlaising the Banks above and beyond buying up and removing the toxic ABS and MDS. Now that has a silent audience as it is two prong attack on the credit crunch which the world centrla banks cannot reasonably and ethically affords.

For that reason the bailout package wouldn't cure the problem. In the UK since 2001, the commerical banks have taken over 1 trilion dollors in CDO swaps with the central bank of England. Still the banks need more and will soon have no more high quality asset bonds to swap for liquidity.....then what next.....so they need to be recapitlaised and the bale out US style wouldn't helped them indirectly or is the bail out already occurred here – silent nationalisation of unmarketable assets.

Banks cannot do another round of new ordinary share issue, it would look crass and will diminish confidence further....and no one know how to recapitalise the Banks other than to use more tax payers money?? And so the UK Blue chip companies Dow Jones averages will be owned by the tax payers? Socialism for surety and that would not be palliable to Congress or Parliament. A vicious circle is what we have................

United Kingdom

Judging by the hype, the bailout must be necessary, but in my eyes, the case hasn't really been convincingly made.

What exactly will happen if the bailout isn't passed? has this been adequately explained? Are we sure that it won't happen with the bailout? I think the most miserable situation would be if the bailout were passed, but the feared meltdown or whatever happens anyway.

I haven't read about one alternative. It seems very strange to me ... it seems that there just has to be some alternative. Maybe the mortgage holders should be bailed out instead? Wouldn't it solve the problem if the principle of the bad mortgages were reduced by the amount of value that was lost on the house? Isn't there any alternative at all to spending $700,000,000,000 !!? It seems odd if there aren't any alternatives. Why isn't anyone suggesting alternatives?

Maybe there should be a special one-time tax on the rich to raise the money ... how would that be?

Hi there, I somewhat agree with your comments but I believe that the present recession is mostly due to fear and lack of trust more than real fundamentals. It is true that the housing sector is crumbling and consumers spending contributed to rescue the economy from the past recession in 2001-2002 but on the other hand US consumers were spending then money they did not have.

Americans must reduce their liabilities and these evenst will serve as a hard lesson to many. Going forward the debt ratio in the US will shrink and Americans will be more thoughtful in saving money and building a nest egg so that the next time they'll be better off in facing a similar situation.

Using your home as an ATM machine doesn't mean that you're now richer than before. In Canada we're doing things differently: our mortgages for instance are NOT tax deductible like in the US and therefore Canadians have been very diligent in paying off their debt.

Our financial system is much more regulated – I know because I work in it – and lending is very much scrutinized by financial auditors leaving very little space for "cow boy lending" strategies.

Having said that, I believe the US economy is the most resilient and global based than any other one in the world. You guys will get through this. Our faith is linked to yours as we're trading partners. Look north for some solutions to this mess.

Unemployment rates are half now than we had back in 1990-1991and as soon the package is passed – hope so – slowly but surely money will start flowing again allowing banks to trust and lend to each other. The recovery will come faster than you may think.

Thank you for your time. Your commenst are welcome of course.

Take care and God bless America!

Robert Montemurro MBA

Ironically, part of the bailout is supposed to keep credit flowing to consumers. Simultaneously it was also consumer debt that contributed to the problem. When will these people ever learn to tighten their belts and live within their means, if the government keeps throwing money at them?

Your article seems to be full of pessimistic previsiion. Why do you ask then if we agree to it)? Obviously you aren t so sure abour your pre-dicitions. Pleas don-t opinate, rather look for good ideas to overcome the situation.
Thank you!

While most people seem to be in panic , I'm still looking for the downside to the 'credit crisis' but all I'm hearing is that people won't be able to get into debt to buy unessential new goods such as cars, pickups etc. That they will have to save up for luxury items rather than having them now (at higher cost than they will when businesses are forced to drop prices). That those people who relied on 'credit card living' will now have to live within their means. That greedy and inefficient businesses will be foced to close and those that expanded within their means or/and remained diciplined with their overheads will prosper and grow. That overall prices will fall and housing will come back within range of first time buyers even if they do need to save a bigger deposit and probably pay higher interest (7% of 100k being better than 6% of 200k!! from a buyers point of view). And yet we are supposed to believe that by injecting 700 billion dollars (and perhaps altering accounting systems so as to further disguise losses) and thereby encouraging us all to continue riding this debt train that this is going to improve our standard of living enhance the wealth of our nations and be an overall 'good thing' for our economies!

I agree with you that this bailout is not going to work. At best it is a bandaid on a massive hemorrage, slowing the effect, but not curing it at the source. Futhermore with Congress tacking on several non related pork barrel ammendments to get them through this legislation, it shows the leadership has learned nothing and further enhances the Lost Morality in both the system and the leadership. In the mean time, the bailout will further indebt out nation to China, Russia, Japan and the Arab Nations who will be needed to buy up the bonds to raise the cash necessary. For the long term, I fear the worse.

One thing you can definetly expect is HUGE inflation increases, But then again greed is the real issue, Its hard to understand why Mr Bush can find 700 Billion to keep the greed going but yet a little child is asleep in an alley? And George calls himself a Christian haha

I am surprise to learn that businesses run on credit like consumers live on credit. Is living above your means different for businesses? What I hope comes from all of this is EMPATHY. So, we can all just get along.

Up until about a week ago , I had the greatest respect for Warren Buffett , mostly as the ultimate , smart businessman, but also one with some kind of moral fiber.

Now it appears that he too is quite happy to jump in and make large profits in the long term off the backs of hundreds of thousands of innocent victims of Wall St gamblers and speculators. This in my humble opinion, is way beyond 'good business'. His ' investment' in Goldman, is no different to a vulture picking the bones of an animal , already mauled by the fat cats in New York. The GE deal maybe somewhat different.

Can someone please tell me if my assessment is wrong..

Instead of bailing out the banks with that amount of money which might or might not work, why can't the politicians consider dividing that money into 10 – 20 million parts and paying off the mortgages of a significant number of close to defaulting American homeowners. They would each get 35000 – 70000 dollars. This would also prop the lower end of the housing market, lead to a slower fall in house prices even of medium priced ones. Banks will benefit and be more willing to lend. Their toxic assets would decrease. Ordinary Americans would feel directly benefited. Overall a win-win solution. Then again would politicians really care if money does not enter the same system that lets them thrive.

The financial crisis in America is far worse than the Government is telling the public – this $700 billion bailout is a Band-aid solution for a financial "heart attack" – it makes everyone feel better that something is being done but will be completely ineffective against the true underlying problem.

This collapse of the "House of Debt" economic system was inevitable regardless of who the government is pointing the finger at presently. An economy based on unlimited spending and indebttedness is bound to fail.

The Bail Out package will vanish without trace. The impact will just be of
a psychological nature. I bet, the real numbers of what we are up against have`nt even surfaced yet.
700 billion, why not 2500 billion? Nothing will be enough and anyway, it will just corrode the system.
The only interesting question is , what comes next?

The bailout, if passed, will set a very dangerous precedent. It must NOT be passed. It is imperative, however, to do the following:

1. Punish those responsible (if any) for the disaster.
2. Enforce stronger and stricter trading rules – this will reduce entropy generation in the economy.
3. Reduce substantially the complexity (depth) of derivatives. This too will prevent very fast entropy increases in the market. Some derivatives look like quantum mechanics!
4. Recognize that in very turbulent economies, conventional risk rating and risk management techniques simply don't work.
5. Move from risk management to complexity management. Our economy is complex and it will continue to get more complex. Today, complexity can be measured and managed.

Bail-out, I believe, is not only to bolster the market, but also to rescue, not the Investment Banks, but the underlying homeless US citizens. As I understand lending policies of US commercial banks, sub-prime crisis have been taken over by investment Banks from commercial Banks, the latter being the direct lenders under sub-prime mortgage. Investment Banks should have been brought, long back, under the regulatory system of the Federal Reserve and also SEC, in as much as these Banks are trading in mortgage-linked security of sub-prime lending of commercial Banks and as the trade amounts to indirect lending to such housing. Had these been done earlier, leveraging norms could have been enforced by the Federal Reserve at the initial stage itself. The requests of GM & JP Morgan for status change to commercial Banks are pointers here. Secondly, the bail-out is in other words a market intervention to increase the liquidity to restore the confidence of inter-Banks which include banks worldwide. Thirdly, the moves of US govt., will, to certain extent, stabilize the US$
Fourthly, a world market can`t be developed overnight with a booming investor confidence. This could be done over a long period only which is inter-linked to policies of the Govt., concerned, it`s strength,etc. However, my heart goes to those innocent homeless citizens who, I read in News column, are sleeping inside cars parked on rentals. The bail-out, must,therefore, address the sufferings of those citizens also.

All of the suggestions made have merit. Some (i.e., temporary
freeze on foreclosures of primary residence), are better than
others with an immediate effect.
However, what we're seeing is the cascading effect of the
imploding bubble. An implosion that is near reaching
"critical mass" in momentum will neither distinguish
between sub-prime or prime, sound business opportunities
or worthless scams. If something demonstrative is not done
quickly, we will go into the next "Great Depression".

The bailout is a necessity, although only the beginnings of a necessity. A quick examination of the history books leaves no questions as to the cause of this financial mess, a point which Mr. Benjamin seems to ignore: free trade itself IS the problem. Regulation is a necessity in any dynamic economy, although regulation itself has to be kept in check.

I agree with Mr. Stevens' points on helping the economy get back on its feet. We cannot now let an overheated sense of justice, pushed for by the hysteric masses, allow us to take our eye off the real problem. In the late 1980s, the Japanese government refused to bail out it's banks. It's stock market is a third today of what it was back then. The Scandinavians, on the other hand, bailed out their troubled markets, and the government was able to make a tidy profit through stakes in several banks, which was promptly fed back to the taxpayers. Scandinavia came out of it's economic downturn in 1993. Japan still hasn't come out of it's crisis.

Economic doom-and-gloom pieces such as Mr. Benjamin's, I'm sorry to say, do nothing but to propagate mass hysteria. There are solutions to this crisis. There are solutions to any crisis. If humanity had believed every prophet of universal misery, we should all have committed mass suicide before birth. With all due respect, a piece on the potential solutions to this crisis would be better received than the current fear-mongering.

The current economic downturn may well strike a blow against the Republican Party's blatant advocacy of laissez-faire, if so, this will be a most welcome blow. But I somehow doubt the US population, a fifth of which is incapable of locating the US on a world map, will be capable of comprehending this.

As for the image of the United States abroad, should it show it's ability to lead and ignore the current finger-pointing and fear-mongering, this should receive a tremendous boost, although, thankfully, not in the name of free-market capitalism.

I live and work in Rome, Italy,and have seen the fall in the value of the U.S. dollar ever since the Euro was introduced in the European Community. With the current financial crisis in the United States, it is painfully obvious that the crisis in U.S. financial markets and the packaging and sale of morgaged debt, has slowly spread to Europe.Thus, the U.S. model of free market enterprise capitalism, is less likely to find itself as a model for export. Rather, the conservative style of European banking, relying on bank deposits, and tighter controls for speculative financial instruments, may be of interest to U.S. regulators after the dust settles in the current crisis. How does Sweden or Germany or Holland, for example, regulate the banking sector. It is time, in my opinion, to look at our European neighbors for remedies and solutions and regulatory models. Meanwhile, as foreclosures increase, and banks go under in the United States, I ask my fellow Americans to demand from the U.S. Congress to stop spreading the pork and look at real regulation for the banking sector.

How a bit of history for a change?
This is what "Thomas Jefferson" wrote in a letter to the secretary of the Treasury in 1802.

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

Bailout package won´t work, as it is a basically a reverse Robin Hood – taking from the poor to help out the rich ...

But, from there, you need to change peoples mindset ... Lets remember what got us into this. Greed. Greed from Wall Street (giving to people who couldn´t afford to repay), Greed from Main Street (accepting when they couldn´t affford to repay) ... don´t take a loan if you can´t afford it. Don´t buy a house if you can´t afford it .. but herein lies the problem – it is the great american dream to own your own home, and as god as my witness I will – at least until I can´t afford to repay the loan and I get kicked out the streets, complaining why!? why me!? ... but the banks will be protected by their friends in treasury who will bail them out.

Sure go ahead and give billions of our dollars to the banks while they take our homes and lives away from us, why not?

We need a rescue plan for the economy but it must be the right one. While I like the fundamental core of the bill, an oversight provision , addressing CEO bonuses, improved level of FDIC, taxpayer protection, etc., In my opinion we are still missing some important points.

One, we need language that states lending practices will be revamped and regulated.

We need language that will change the way credit card companies do business with the american consumer.

We need language that will place all of those institutions that got us into this mess to be on "probation" or some sort of government "watch dog" list. These institutions do not deserve to stay afloat and they should be absorbed by the market.

We need greater and more specific language regarding CEO's and their compensation/bonuses. If anyone shares direct responsibility for getting us into this mess, it is these irresponsible CEO's.

And we need assurances that an investigation will be conducted into those responsible for these lending practices and JAIL TIME NEEDS TO BE SERVED!!!!

As the market rises and falls dramatically every day, who is making a profit on this?

Do you believe that there are wealthy large investors playing the DOW and other markets for their own benefit. Buying a large number of stocks thus driving the market up 200 points then selling them off to gain a quick profit thereby driving the market down again, only to repeat this process over and over again? Would this be a form of stock market abuse that all of us are paying the price?

What we shall probably face is a huge slow down but not a meltdown. The bail-out will help not to make thinks worse, but the leading economies must enforce quikly new regulations to bring the financial markets creativity under control. That is an obligation for those governments in the leading financial markets which carried the entire world into the present situation. The USA will remain the beacon of capitalism and free markets, as free as convenient. Not for any moral leadership, but for the fact that they represent 40 % of the global GNP.

The problem is not Wall Street vs. Main Street. We are all connected to a high-speed, complex economy that does not produce enough real goods any more. Thus, our economy diversified laterally and invented new services and niche industries. There is a lack of tough creativity and new enterprises needed for a global economy. Only new industries created to confront the gigantic task of cooling and cleaning the earth while still powering up a knowledge-based society that can provide basic nees to ALL its citizens can rescue us.

The fault is not in Wall Street. It is in us for dumbing down, rejecting science and knowledge, goofing off in school, and refusing to save from our paychecks for a rainy day. We are in the biblical "seven lean years" and need to change our "lifestyles." We can pull ourselves out of this mess by electing smart leaders and respecting learning and producing real goods.

No such thing. We short circuited capitalism and let the FED create billions out of nothing and lend them without security to all and sundry. They got excited and built, purchased and spent and created lots of work to replace the work in the industries exported to China.

We should in stead, have retained our industries, protected our workers against slave labor in the over-populated countries, and managed with the money we could save ourselves.

Capitalism would normally have to lend only that capital saved up by the people. If more money is required, then the interest rate will increase, if less capital is needed, it will descend.

What the FED did was produce imbalance and delayed and delayed inflation.

Hi, The bail out package will not halt or help the crisis.. Let the people responsible for the mess go down with it and perhaps that will teach other investors about ethics and how not to speculate. its insane how banks and investment companies play around with such amount of OUR money and the whole system is inviting for greed..

Capitalistic Democracy has proven to be a shameful system and bring out the worst in people. How much money is enough?
You wanted all and now you have nothing. I hope this will not even stretch out so far outside USA that my mother in Sweden have to leave her house too. This insanity has to stop...

look inside and stop putting asphalt on mother earth, stop replacing goodness with greed, awake from your nightmare US!

Michael Stevens has the best idea so far. Bail out the people not the banks, keep people in their homes or the bills will get higher. AND put a lid on those outrageous bonuses and salaries. Shareholders – you are being severely ripped off, it's about time there was some real "equity" in the market place.

I think our politicians are idiots. They have just sadled all of us with a great debt. I will not vote for any of the ones that voted for this. Since both Presidential candidates voted for this – I'll just have to pick the lessor of two evils. Probably Obama. Though hes like all the rest just talk. Four years from now we will be hearing the same thing – we need change, our healthcare system is broken. We are the laughing stock of the world – I'm ashamed to even live here.

Son- 1/never a borrower or a lender be. 2/ Always tell the true. 3/Do unto others as you would have them do unto you. 4/ Don't try to convince or influence others with force-they will resent it and retaliate.
As my coach said " You are all a bunch of miserable screwups-we are going back to basics".

I am a strong advocate of the theory of monetary economics, and to this end, I believe, the bail out package will help alleviate some of the liquidity shortage within the US market. However, I am of the opinion that the bail out package by itself cannot be considered a panacea for the credit crunch.

This is because the bail out package will not weed out the institutions that have been grossly responsible for the misallocation of scarce resources, which is the primary cause for the current predicament. Instead, these institutions will will be given a life-line to continue with their inefficient and non-value adding operations.

To address this, the free market mechanism must be allowed to operate unhindered, as painful as the short term effects may be. In the longer term, the economy will evolve to become resilient, the weak and inefficient institutions will either be acquired by stronger and more efficient institutions or will simply experience a natural economic death. There will be a loss of jobs and security, and this is where the US Govt must intervene to facilitate a smoother transition for these people to acquire new skill sets for a new economic landscape, where there is improved allocation of scarce economic resources.

This will of course take time and will not necessarily be completely addressed within one Presidential/political cycle. Hence, the deliberation and ultimate decision is driven by politics and not necessarily economics, whereby the "quick fix" solution with short term benefits is almost always opted for in return for electoral votes, at the expense of the long term benefits.

Until the issue of accountability is resolved injecting money into a failed system will only bring short term releif.
The financial sector is very much interested in the here and now and not the long term. Managers are paid large bonuses for closing deals regardless if the deal is good or bad. If the deal turns out to be bad a golden parachute is offered to those in charge and lower level employees are made redundent to reduce costs.
Until this kind of behaviour is addressed nothing will change.

The bail out will be an aspirin to the suffering, but will not kill the cancer. Certain large investment, banking and mortgage firms will be helped with large amounts of money to continue their operations. I don´t see any plan to rescue the common citizen from its debt and, the money that will help the large firms to survive comes from the taxes and savings of all of us. In other words, this situation is toward a SOCIALIZATION OF THE LOSSES!!!

Do we really need hi paid people to work in the financial departments of our government? I don´t think so, any one with minimun education can cause this caos.

The main rpblem with this credit problem is simple.
Look at where it started in the US.
They live on nothing but credit, pay by cash and you will be looked at as if you are mad.
Most people in the EU have 1 credit card and maybe 1 debit card.
Most in the US have wallets full of cards.

GO BACK to old days save for what you wont and dont buy it on credit.
Company should stay within thier own limits and not go beyond what they can afford.

I think the enomonic crisis goes way beyond Wall Street and mortgage issues. It goes all the way to the bottom. American spending is out of control on every level. American's want more. More, more, more. We are an excessive nation who is irresponsible with money. And we'll stab each other in the back to get it.

I don't believe a bail-out is the answer. I believe the only answer is to let the economy crash and bring people back down to earth.

I can't believe what I am reading, "freewheeling capitalism"? Surely contributors to CNN are more versed in reality than that. I’m not big on words, so do some research (for once it appears):

Fact – this crisis is created by subprime mortgages

Fact – subprime mortgages grew dramatically after President Clinton revised the Community Reinvestment Act in 1995. Google it

Fact – due to the large increase and securitization of these mortgages, house prices far outpaced inflation (CPI) from 1996 onwards creating a bubble. Google it

Fact – Fannie Mae and Freddie Mac a government backed institutions that purchase subprime mortgages from other banks or lending institutions, creating a “false” demand for these products as driven by the CRA revision in 1995 above

Fact – only ONE of the two current candidates for President co-sponsored legislation in 2005 to provide MORE CONTROL by the government over Fannie Mae and Freddie Mac and it IS NOT OBAMA. Google it (Bill S-190 The Housing Regulatory Act).

So, Republicans in congress developed legislation to create more control over a run-away social engineering experiment driven by Democrats and Todd Benjamin thinks this is “freewheeling capitalism”? Go on vote for the change that got us in this mess, you deserve more of the same. Ayn Rand is rolling in her grave.

the bailout wil not as such solve the problem unless the us government actively goes afther the wall street fat cats and the money they made thru in morral behaviour wich i dopubt since that would mean that there long term dreams of being invited into the old boys network wil be destroyed the mometn the take action against the walstreet firms.
personaly i thionk the best way would have been to use the money to solve the bad morgage crisis thru bying those from the banks and give the people the chance to make a fair morgage on there house instead of the ones they have now

Todd, you're absolutely correct about that the bailout package won't fix the crisis. But neither will denouncing capitalism and free-markets and start to look at China as some sort of weird role model for our future generations. I don't know about you Todd, but to me that is a quite worrying future. State regulations and protection got us in to this through creating Fannie Mae and Freddie Mac etc, and now they are bailing them and wall street out. I don't believe in this method. You cannot privatize profits and socialize losses. Then you definitely do NOT have "freewheeling capitalism", you have quite a regulated market. Now Mr. Paulson will be some sort of weird economic czar and it will not lead us anywhere. Maybe to a situation with a form of Chinese "democracy" with mass surveillance and massive state intervention in our economy and private life.

Pro Libertate Nostra!
//tegis.wordpress.com

I am glad that finally it is time to talk real politics in the US, a superpower run until now as a two party market totalitarism parading as a democracy. This farce has been played before the American people for much too long and until now middle class was mum on the issue.

Real polirics, that is to say, meaning of capitalism and socialism will surely be discussed in the future.

The gimmick played by the House of not passing it the first time and then passing the bill after scaring the public by the stock market drop following the first vote and adding a few sweeteners will surely be seen by more Americans.

If there was democracy in the US, the approval rating of the House and the president wouldn't be under 20%. This is not just another number. This means US government does not represent American people!

Simple fact but people keep overseeing it. Corporate democracy goes only so far!

Where are the Free Market guru's from IMF? They advised complete lack of government intervention in every other country around the world and America prospered. Why are they not allowing the same "Free Market " principles to solve America's crisis?

What will people in South America, China, The Far East, Poland, Russia, Afganisataan and Iraq. thinks if when you are sick, you wont take your own medicine!

The package, will not work if not follow by severe regulatory legislation , if anything else is not done it will be the final heist of the wall street against the capitalist economy. And since the problem is confidence, many companies most change their Executive board in order to gain the confidence of the investors. Finally, the sad really is that banks don't want to loose money. So if the people can't pay, the the government must pay.

Could CNN do a show on identifying the "pork" elements in the bailout bill and who were they sponsored by? Thank you.

I am a MBA from IIMB and also a US Mortgage Underwriter. This bailout package is just a temporary instead they could have invested in the Human Capital to make the education accessible to the students, why should everybody pay for the mistake of a few. It is wrong to say that they did not have any clue till the bubble burst. There were signs that things were not going right since 3 or more years. The so called Leaders keep quite and see all the drama going on till the bubble burst. This is not a game. This is real life and is being played with many peoples lives and sentiments. we feel this bail out package is just to show the public that they are doing something ahead of elections. I dont know how much of it would really help common people like us.

I also will not be voting for anyone who supported this bill. I have never been more fustrated in my life. Let the market fall it would fall hard but we would make a swift recovery. Now were prolonging it, and it will be much worse and harder on us. You watch and see a year from now we will be in a worse way and everyone who voted for this will be pointing the fingers at eachother, and the Americans that beleived their leaders in the house and senate will finally open their eyes and relize that Democrat- Republican it doesn't matter they obviously aren't there for the people. But unfortunitly it will be too late. I hope all those extra's that are going to be given ARE HAPPY. It's sad becasue the Americans that believe this is the right thing will soon have a rude awakening.

Unfortunately the bailout bill has passed. Unfortunately not only for you, Americans, but also for us on the other side of globe. This much is obvious. Several large financial groups (families) have managed to bail themselves out of their own mess(es) through their lobbies in the administrative elite of the US. The people of USA will pay now. I have nothing against that: these are your boys, you pay for their broken windows, etc. What I object angrily is that these measures a) are camouflaged as a "help to the common people", which is not true as commentators note time and time again; b) these actions skew whatever objective economic picture the western world may have left, and removes them people farther and farther from the "real thing that makes ones life worth the effort of living". And in the case of poor Latvians, it give us so crooked an example of "proper governance" that it may finish off the remains of honesty in our government once and for all.

People of USA, if you really want to do good for the rest of the world, why don't you go on a revolution against your elitist cliques and make them into "mind-their-own-business" folks?

Why didn't we nationalize the banks like they did in the UK? That would have placed more confidence in the banking system by lender and borrower alike. "Bailing out" Wall Street, regardless of any spin one places on it, and will have lasting repercussions.
We have failed miserably. It would have been wise to listen to the EU rather than think that we have all the answers. The system simply cannot work without controls.

In the short term it will help, in the long term it will hurt. Corruption has won again as failed CEOs and executive get to keep their jobs, businesses, and millions of dollars.

How much failure are we going to take from our government?

Elections are coming up, it is time to elect out all those that rushed this important process, and elect out all those that voted for such a corrupt and reckless bill. When it comes down to it our government won't help us everyday american citizens and we will have to help eachother.

The US Debt just got bigger. Oh well. It's "just" 700 billion dollars (the equivalent of the cost of having the army stay about 2 months in Iraq). The only solution would have been to pull the troops, lower military spending, increase taxes (preferably the rich), control other expenses, and hope to soon see the debt shrink back.

But as such, we're sending the message that the federal government will keep subsidizing greedy companies whenever they're not competent to stay afloat by themselves.

And by the way, how can banks fail??? With the exception of subprime mortgages, they impose huge amounts of interest on loans, but only give back a small amount of return on our savings. Plus they drown us in bank fees. Yet they still can't manage to survive? Let them fail! If the government is to rescue them, maybe we should have a non-profit national bank that's owned and operated by the government.

Here's an idea, why not give every Amercian 2 million dollars. They would in turn spend this and boost your economy. They could pay off their mortgages, buy that car, set up education funds, invest and best of all have money for those ridiculous medical costs you have. In any event the money would all go back into your economy AND there would still be $600 billion dollars left to pay off the banks. Everybody wins, especially the taxpayers and here's a scary thought, if you really wanted to help your citizens and NOT help the banks, give everyone $20million and the pot is empty for the banks.

I am a Realtor in Santa Clara County in the heart of California.
I have seen at least a decade of rising markets. Back a few years ago lots of business changed, lots of business went to the realtor/lender that could do things I doubted would benifit the client, now lots of these buyers are losing the homes they bought. There is a real mess. I for one have been through the boom then the fall out of Reltor/Lenders coming into and out of the markets. I don't know exactly how this will benifit sellers that are losing their homes, it is really hazy what exactly they are doing for the bottom of the housing issues, but I beleive the banks need more workers to manage the contracts they have not been able to get through. To eliminate the looming mortgages, these real estate sales need to be closed before the government can figure out who needs what.
Taking 3 or more months to close a short sale or even bank owned shows that theres a need for control at this level.
Denise Stuart
http://denisestuart.spaces.live.com

The working population world wide are going to suffer from the crisis now developing, myself included. As European, reading the debate in USA, it surprises me how very few of you over there are not able to see that it is the capitalism as such that is at the root of the problems, creating inequity all over, not at least in USA itself. Try to read The communist Manifesto and adapt its anlysis to the to day world situation. It also suggest the necessary solutions. Bailout is NOT one of them. Socialism is made a monster, but as Naomi Klein has exposed in her book "The Shock Doctrine – The rise of disaster capitalism", capitalism has probably killed more people around the world that socialism has.

Mauri

No, it will fix the economy in the short term, and also long-term if the "investment" is well-managed and ensured that it's used for the purpose it's made. This would of course involve a tighter regulation of the financial market.

No, I think moral authority is not lost as a beacon of capitalism, but, yes, it has been eroded somewhat. The question arises why this situation was not foreseen, even in the middle, when those bad loans were being made and there was no intervention made?

Yes, of course the legacy will linger as it's no ordinary government intervention. It should be ensured that this legacy serves as a lesson for the times to come as it's not easy to bear the costs of such intervention more than once in a generation.

It’s absurd to believe that many of the politicians who allowed the current financial crisis ro develop have fixed it in a week by a poor piece of legislation that should not have made it to the floor.

Republicans and Democrats own equal shares of this mess but don’t expect any in congress to say that. Responsibility has always been in short supply among our privileged class.

The main objective of the bail-out plan is to restore confidence (or whatever is left of it) in the system. It may not be the best solution, but right now it seems like the only solution available, whether we like it or not. For days now, I have been following the news/blogs/commentaries/articles closely and I have one question for the plan's opponents: What better alternative would you suggest? The notion of punishing the rich and evil guys of Wall Street and throwing money at the hard-working middle-class tax payers sounds like the ethical thing to do (and it certainly is in an utopian society), but is it really feasible under the circumstances? I just wonder...

Why didn't all you american voters listen to Ron Paul? He predicted this crisis as far back as 2000 and said things need to change. You just didn't listen. It's all over for America now. The power shifts east to Europe and Asia. The dollar is a worthless currency and everyone outside the USA has just realised it. Within a year, oil will be priced in Euros, as the dollar has no value. Look forward to Zimbabwe style hyper inflation as the fed keeps printing money. America will be the new Third World. The shrinkage of the empire will be astonishingly fast. Prepare for the worst.

There is only one thing that counts and that is: "value for money".

Speculation bubbles and leveraging only degrade and destroy this most basic of investment principles. Any system that attempts to subvert the inherent value in a purchase by inflating its cost so as to extract exorbitant profits is doomed to eventual, catastrophic failure.
H. Paulson, P. Gramm, J. McCain, B. Bernanke and their Bush-league cronies knew this but threw us on the fire to keep their war-profiteering friends, allies and supporters warm and in the black.

How long must we continue to pay for their excesses?

Question, now that the bailout has passed, who has control and oversight over the funds? What happens when we bailout all the bad mortgages? Lets say a judge lowers the interest and mortgage so that a couple can stay in their home. (As we know from history the housing and economic markets run in cycles). What happens when the market rebounds and the home value returns to what it was previously? The couple suddenly finds themselves in a windfall situation. They sell the home and reap the benefits of the government bailout without any type of re-course or re-payment to the institution that bailed them out. They benefit from the taxpayers money in this bailout, and yet can turn around and make a profit from it, where is this fair to those of us who cannot afford to purchase a home? Or where is it fair to those who have already lost their homes?

Sincerely,
Randy M

The same as the first Great Depression, this second Great Depression is to be blamed totally on State burocrats. Both where induced by the Fed by blowing a big bubble with it´s expansive monetary policies and artificially low interest rates. Now the bubble has burst and we are contemplating the disaster.

Before the Central Banks were founded in the early XX century, the liquidity and credit in the economy where only created by the private banks according to the old laws of supply and demand, and there where cycles but nothing as catastrophic as the Great Depressions number 1 and 2.

This disaster has nothing to do with fianancial free markets and everything to do with Central Banks generating huge financial bubbles. We have to get rid of Central banks and let private banks generate liquidity, credit and interest rates in a free finantial market.

Let the great equiliser do its work.Capitalism is a beast that will devour those who think they control it , but socialism has failed and will always be a failed system as the yanks will soon find out.

Viva CAPITALISM

They are trying to solve the consequences not the problem. The problem is lack of propper regulations and acqurate market information. Globalization and the speed and pervasiveness of communications have being speeding up Capitalism, starting with the Financial system, the most bound to be "mapped" to the net since no physical transfer is involved. The return from decisions is now much more inmediate than was 10 years ago. Not only the political system and corporations, but also the general public (each one of us) has switched to short term mode. So, even if politicians or corporate executives had a more strategic view, we would be pushing them to take short term sighted decisions. This favours high-risk acceptance (We all think the consequences of high-risk decisions will materialize someday, but maybe not precisely tomorrow...). Throwing money on that overheated machine won't solve the problem. The problem will reappear as soon as the money is over again. It's more regulation what is needed. A regulatory frame thought for the Globalization era. But, who is so bold to apply that brake? I'm not an optimist about it.

I believe that I have just witnessed *****TREASON***** with my own eyes and ears! Well they passed the bill -- in the house -- the FAT CAT RICH are dancing in the street! They pulled off another crime against Americans as a whole. That sound you hear in your ears is the Prison Sentence Time TICKING UP on the Main Street American (with one house or less) that has to pay the dime and do the time for the excesses of criminals - AGAIN!!! VOTE THEM ALL OUT OF OFFICE>!!!

Hello Todd, I always find your comments and analyses very interesting. I am not in finance but I like to take a look at the big picture. And yes, I agree "the wheels came off". It's time for a new system. The bail-out package will only prop up a failing system for a short while. We're in a new century and at the turn of each new century, things have always changed radically.

We need to rethink the bases and mechanisms of our western economic system. The trust in our present system is gone. It will take a very long time to build it up again, if that's at all possible. The greedy high flyers with golden wings and golden parachutes have shown us how utterly unconcerned with mainstreet they are. One thing we do know from the past, though, is that high flyers of all kinds have ended up by triggering revolutions, as in the Americas in 1776 and France in 1789.

Not only has the US lost its moral authority, but it has become resented and often hated. It can only be hoped that some of the cautionary/precautionary and transparency measures contained in the bail-out bill will serve to re-establish the image of the US as a financial leader who is leading "by the good example" and not by following the old strategy of "do as I say but don't do as I do".

I say this looking at the US from afar as I live in Switzerland whose banks have been plagued with major confrontations and problems in the last decade and whose good reputation is now dangerously at risk.

As I read some of the comments – It seems that some PAID POSTERS are on here – trying to SOFTEN the BLOW with typical Wall Street Tactics.

Knowbody knows!!! I lived in the USA for 12 years, coming from Germany. It always amazed me, that the American pure capitalistic way of handling the economy and society was never questioned. To me it always felt like a big flock of sheep being taken care of by wolfs. The American public (and the world) is finding out, that they are the ones that will be bleeding for a long time to come because of what they let themselves carelessly in for. Perhaps they have the sense now to take bold steps to exchange wolfs (please no aerial shooting!!!!) with good shepherds. It might help to vote intelligence and integrity into the White House instead of “SIX PACKS” on November 4th!!!

The Bailout will help. But I think the economy will naturally stabilize with time.
After all all this money people are getting out of selling have to go somewhere.
Inevitably it will come back to the market, probably not all of it will come back to the stock market, but part of it will do.
Probably some new rules will have to be enforced in order to avoid artificial wealth construction out of speculation . Rules so that the kind of situations that can not mathematically be solved in another manner than by a financial crisis do not arise.

This is a bipartisan effort with a huge price tag. The beneficiaries are not the rich or the poor. Or main street or wall street.

The beneficiaries are the irresponsible.

To avoid the short term pain (and political implications) of market corrections, tight credit and failed loans; our government has decided to commandeer a collective $1 trillion dollars to use as collateral that will guarantee that irresponsible debtors will pay there obligations to irresponsible lenders.

The hope is, that the loans will be paid. But, if they are not, the money disappears. It’s like the government using my house as collateral to ensure my irresponsible brother pays his money to his likewise irresponsible (and greedy) lender. I hope he pays, otherwise they’ll come for my house that I worked hard for.

Either way, it sends a message. If you can’t afford the loan, go ahead anyway. The government will probably bail you out. And to lenders: there’s no real reason to forego the highly profitable, more risky agreements. In good times, you’ll reap the benefit of the high profits – and in bad, the government will bail you out.

And to the responsible homeowners and lending institutions, your prudence isn’t valued. It’s actually going to be exploited to insulate your irresponsible contemporaries.

I don’t know if the bailout is necessary or what would happen without it. But, our parents (grandparents) learned important (and responsible) lessons about money, because they had to endure difficult times. And didn’t take money for granted.

Will we really learn anything from this bailout? I’m afraid we are just kicking the can down the road.

Bailout is the fallout of the Fanie and Freddie GSE (gov sponsored enterprise). Fannie and Freddie had the charter to lend billions to low income people, they succeeded beyond Washington's belief. Since that was a gov sponsored enterprise. Obama and others applauded its success and accepted millions in lobby money, Obama second only to Sen Dodd who is the chairman of the Banking, Housing, bla bla committee. So, it turns out that the gov is the root of the problem, not just greed. Efforts to clean up the regulations of Fannie and Freddie were staunchly rejected by the Dems because those poor folk would not be given loans at zero down and little income, them are votes, folks. Being that gov caused the problem, shouldn't they fix it? After all gov promised the loans to be good and you and I invested in investment companies that were getting good returns on Freddie and Fannie loans!!! Guess that makes us the greedy ones? Why doesn't gov go get the millions of bonuses from the CEO's of Fannie and Freddie....no no that would implicate the corruption...oooooh. When will the electorate looks at the facts and not the twisted news crap.

The Government has lost it...again! Here is a fine example of your voted officials disregarding their constituents. The majority of the population does not want to spend 7B on a bail-out that will not work. I predicted this happening five years ago. In the late 90’s, I saw the opportunity for enhancing my 401K by investing 100% in real estate. I made money. I noticed 18 months ago that the market for real estate was leveling off and the tendency for dropping was all in place, based on my insight with my lowly BS in Business and Economics. I move all my stock into a “safe haven”. Sure enough, bang, it happened. I had moved in 2003 from New York to South Carolina and was shocked to see the housing prices. I still own my house in New York, and was looking to buy in South Carolina. I predicted that in five years, the market drop would provide the opportunity to buy real estate, and sure enough, we purchased real estate for 1/3 of the costs in 2008. Almost exactly to the date of my own prediction. This bailout is eerily in line with this analogy:

Greed is essentially an addiction. The drug of choice here is money. They only way to cure an addiction is to interdict and have the addict hit bottom. At this point the rebuilding begins. During the crisis, you do not condone or provide the drug to the addict. It is the addict’s problem, and it needs to be faced solely by them. In essence, this bailout is simply providing an addict the drug of choice, not providing the cure necessary to prevent re-occurrence of the same addiction.

The Market has to fail, the giants that created this problem need to fail, and be assured that there are individuals and other institutions ready to jump in and provide what is needed to prop up these failing organizations. Of course, there will be an economic fall-out, and the market correction will hurt us all, but it is the only sane way to cure this problem. No matter what happens, the American people will see no benefit from the current trend to spend 7B on this issue. Scare tactics used by this administration of no money for loans to buy a car or purchase a home are ridiculous. The American dream still exists and is more resilient than ever. The only benefactors of this bail out are the greedy, and those who have no vested interest in the proposed monies that will be stolen from vested Americans wallets.

Bailout will help. But in any case the market will stabilize sooner or later.
After all the money that is now being pulled out of the market will return to it in a way or another.
Nonetheless rules should be enforced in order to prevent artificial creation of wealth. Artificial wealth can mathematically be solved in either way inflation or crisis. Both cases are to be avoided. So new rules should be established to prevent speculation which is a the origin of this crisis.

Ladies and Gentlemen,

Well the Congress of the United States has fallen for it again and taken the struggling and unwilling American public with them. There were no WMDs and we started a war. Now an embattled Administration with the lowest approval rating in memorable history and a myopic view of the world and reality has saddled us with an astonishingly large debt to mitigate a phantom economic crash.

Got ya!

BUSH"S LAST SLAP TO AMERICANS FACE!!!!!!!!!!!!!! you have got to be kidding me. Lets just keep making the rich richer. Why cant they help out the American workforce? I mean wooden arrows, nascar, rum!? I cant remember the last time I bought a wooden arrow I dont watch nascar, I dont drink but yet I have to help pay for this crap!? Why cant they bail us out wipe my debt clear!!!! If they did that I promise the economy would boom, Americans would have more money to spend. No I guess thats to nice lets just bail out big business and keep them rich. Im almost embarassed to say I'm American. If I have bad credit I cant do anything banks wont loan me money to fix it, but we'll bail out the rich GREAT JOB GOVERNMENT!!!!!!!!!!

As for amoral beacon of capitalism, I think that is an oxymoron. Capitalism is fueled by greed, which is why we are in this mess. Those that stood to make the most lobbied for and got deregulated markets. Now that they have pillaged the system, cashed-out and are holidaying in the Bahamas (fig.), they can watch as the working class picks up the pieces.

The Chinese will emerge as the winners in this game as they have educated their youth in science and engineering while our kids studied business. Shifting our economy from a producing and manufacuting base to a financial base will ultimately be our undoing, as we are experiencing these days.

Of course the bail out plan will not fix the real economy. This is just a measure to stave off the symptoms of a recession, until the next crisis comes along. It is a very fictitious solution to an enormous problem, and will not help the plight of the "average joe" who through no fault of his own found himself in this sordid mess. What a pity that we cannot learn from the past; that around this time every decade we find ourselves in the same hole. And such a shame that those who are responsible are never held to account.

Well, the House of Representatives just passed the Rescue Plan.

Yay.

Mr Benjamin, you said:

With the massive bail-out package the U.S. has lost its moral authority as the beacon of free markets and capitalism.

We took freewheeling capitalism to the limits and the wheels came off.

I'm not sure, but I sense that you think that is a Bad Thing?

The US version of 'free-market capitalism' has become, since 1980 (Reagan), at the latest, as much of a failed experiment as Soviet and Maoist 'socialism' turned out to be.

Does the USA benefit in any way, from being a 'beacon' of a failed experiment?

Your sentence about having 'taken the wheels off' is not quite how I would have put it.

Deregulated, corrupt, with known ties to various money-laundering operations, and moral oversight amounting to a wet Kleenex in a rainstorm, free-wheeling capitalism seems to have had the brakes off. The wheels continued to spin, and ultimately, the free-wheeling capitalism ran into an obstacle. It was only luck that the obstacle was not 'rock-bottom'.

I see what you're driving at with your wheel-less metaphor. The credit-crisis would have stopped free-wheeling capitalism in its tracks, and it would have been very similar - in ultimate effects - to having the brakes off, and being stopped by hitting rock-bottom.

Let's hope the House bill will prevent anything from hitting anything.

It is clear that the US needs to rethink capitalism, to bring it more in line with the modern world.

Maaan, am I glad I got the hell outta Dodge a long time ago. The best thing I ever did was to expatriate to Europe. What a mess the Americans have caused themselves. If someone along the lines in the last few decades had made the incredibly important step of pumping money into the American education system, there may not have been so many INCREDIBLY GULLABLE Americans believing they have to consume until they burst! they might just stop and think a minute if it is really necessary for thier survival to be buying all kinds of CRAP they don't need when they can't possibly afford it in their wildest dreams. Someone should demand the politicians in America to pump, along side the $ 700 + billion, twice the bailout amount into the American public school system, get some really good teachers in there and shake some sense into the people. Nowhere on this earth is there so much senseless spending as in the US. And when are humans finally going to realize and take to heart the famous saying "those who hunt profit, never earn anything worth living for"?

Of course you don't fix your son's behaviour by giving him money.
The problem lies deep inside the self of american being. It used to be my model: when I first lived in the USA, I understood the word of a person was worthy, hardwork was essential, and creativity for the sake of enjoying it was the goal. Those values have changed, to the ones of the third world: distrust in a man's word, do as little as possible, and get the most money for nothing, and a lot of gossip.

The US must go back to those principles, or else it will thirdworld'ize itself rapidly!

Hugo Javier Castro. Costa Rica.

Let me see, the pork bill passes and the market drops 150 points? I think I will get my 200 thousand dollar arows out and shoot the man laughing in the picture from Wall Street, after that I am going to go drink 180 million dollars worth of Rum because that is the American thing to do. Once I am good and drunk I will go home and fill my wood stove with some of the premium coal and sleep of my drunken rum night. See if they hadn't add all this pork ( Oh wait I did buy a pulled pork sandwich to get me through all of this) to what once was a three page bill, where would we be today. I agree with those white knuckled politicians as to where would I be in the History Books if I don't agree, but take a look at the market you didn't get your 777 points back, in fact it lost. I would be sweating re-election, going home, and my concious right now if I were you. But your took your new improved (oink,oink) bill and passed such a mess. If the taxpayers are on this hook for 700 billion dollars and you accepted another 110 billion in tax cuts how will this ever be paid. Wait let me get out my 1 trilloion dollar credit card out and just wipe this whole bad nighmare away. If any of your constituents were smarter than you all, better start looking for a job. Oh wait you all have already pushed them to other countries. Well I guess I see you all later and good luck.

It's a mess. Now that the plan has passed, I'm hoping for the best. Whatever that is. In the meantime, I found this hilarious song about the bailout. Anything to lighten up a grim topic: Bailout song

America OWE the rest of the world?

America owes the rest of the world nothing!

First, the US made the whole world rich.

Who does the rest of the world call on when they are in trouble or need help? They call America! And America answers their call!

Second, the rest of the world gambled on an investment of their own free will. Wanting to get rich. America did not force the world to invest.

They took their chances just like the American investors. Subprime borrowers- owe nothing to the rest of the world.

This coming from one who does not own a home or have a mortgage.

Again, America owes the rest of the world nothing!

America has nothing to apologize for.

We have gone around the world for generations trying to build up poorer countries – out of the kindness of our hearts- Not asking anything in return. Individual Americans- donating to the poor out of their own pockets. Not from taxation, but from their own free will. We find now, no appreciation in return..

Maybe we should start calculating all the foreign aide we ever gave out and see just how much America really owes the rest of the world.
or, rather how much the rest of the world OWES America??

Lastly, the Bail out sounds like throwing good money after bad.
Not a good plan at all.

The economic equivilant to "weapons of mass distruction"
absolutly distgusting. Bailouts brought to you by the very people who caused the problem in the first place and now we all continue to be their slaves. Massive inflation,Maxisim and further deflation of the dollar is what we all have to look forward to.$300 for oil in years time. The new world order is a alive and well and i see through the lies. God help us all from these evil corrupt leaders

These U S Bankers have done more harm to the world than any radical terrorist.

Can you apply anti terrorism laws to these radical bankers?

Regards

Peter de
Brisbane
Australia

Johan (SA) -wake up!

What has been happening in USA so far has nothing to do with socialism. If you by "equiliser" mean the marked mechanisms they have the opposite effect – inequity. So: if capitalism cannot solve the problems – what is then the solution? Socialism means that those, who do the productive jobs (produce real value) (definitely not bankers and alike) should not be exploited by anybody else, but decide collectively with their fellow citizens how the values and wealth is best used to benefit all citizens, specially the poor. Meaning real democracy. Socialist attempts so far have not had even a minor chance because of systematic interventions, destabilization, warfare and economical obstructions from the capitalist countries. Just think about the USA blocade against Cuba. Let us work for a humane world, free of all exploitation. In USA too.

Mauri

Off course is the $ 700 bn bailout not enough. But it may create a market for junk paper and leveraged products. Most of it has to be valued at zero. But mortgages will be priced by this market and trading in these paper will take place between financial institutions. The main bill has to be paid by the shareholders of the financial institutions, the bonuses and at last resort the national governements not only in the USA, but around the world. The total bill will be huge, but we will find out soon if there is enough. Maybe more quickly then expected, if the information technology community suplies this part.

The $700 billion "rescue plan" is a panic bandage on a severed jugular vein. The fundamental problem is that the US economy (in fact, the whole world economy) is a house of cards built on the quicksand of debt. The subprime lending catastrophe is simply the result of the extreme to which one segment of the economy had to go the preserve the delusion of eternal growth. And when that wing of the House of Cards collapsed and slid away into the quicksand on which it was built, it sent major cracks rocketing through the remainder structure. Now, if the housing sector was the only unsupportable wing, we could perhaps fix the cracks and rebuild the wing on solid ground. But, there is no solid ground. The quicksand also consists of

consumer debt totalling approximaterly 2.5 trillion dollars (more
than $8000 for every man, woman, and child in this country). And
this debt must necessairly grow faster than the GDP in order to
sell all the new cars, appliances, ipods, cell phones, luxrury
services, entertainments, etc. that must be sold every day in order
to keep the American workforce employed. And the vast majority
of this consumption consists of highly discretionary purchases.

unknown quantities of worldwide commercial debt created and
traded by the commercial and investment banks for huge fees
and bonuses but having no underlying value.

evergrowing government debt at all level which can never be fully
redeemed or monitized but must be serviced or defaulted. The
king of this debt is, of course, the federal government which is in
hock to the world to the tune of over eleven trillion dollars.

a monetary system which is as much as 90% debt. The M2 money
supply (which is composed people's directly spendable assets) is
estimated at almost eight trillion dollars, of which perhaps eight
billion is hard currency. The remainder is credit extended by
financial institutions which is backed only by the ability of debtors
to repay or by the ability some government agency to absorb the
loss.

So, will the $700 billion bail out work? It may bring some temporary relief, but all it really does is convert private debt into government debt. The government will have to borrow that money from somewhere, probably from the same Wall Street financiers who are being bailed out to begin with (of course, if they have $700 billion to lend the government then why do they need to be bailed out). Meanwhile, the quicksand continues to quiver and the House of Cards continues to float perilously on it until the next lurch in the structure.

Damned if you do damed if you don't;I am against this bail out because it it reminds me of what parents do when their adolescent children muck up-pay up,little dears,they just made a mistake.But who knows what would have happened if there had been no bail out?Does America have the money?Of course not but that was never an issue,the rest of the world will pay for it.Again.When will this stop and let the reckless adolescent that the US are finally bite the dust?

barbara may be right (except for the pure capitalist thing, remember the GSE's please), we need to research the facts, not the news.

I am shocked on how Americans and especially the media talk about "the Wall St. greedy" being the cause of this huge mess, when it is clear to the rest of the world that most Americans share the responsibility of this crisis for chronically spending more than what they can afford. Can't make minimum wage and lease a Hummer -time to wake up.

Last remark for to-night:

Åge Mariussens comment (on risk and uncertainty) was very interesting and noteworth. Tank you for the reference.
Mauri

So who do I send my mortage and credit card dept to to have them paid for me - I guess that is how the NEW system works.

You couldn't be more right ! I live as an expat in Granada, NIcaruagua and I have felt this was coming when I left the states in 1997.

What is wrong with us? I fell for the no money down, A.R.M. loan concept in 1987 when the savings and loans went belly up.
Three years later, so did I along with the likes of Charlie Keating with the American Savings and loan scandal. Why can't we learn from these previous historical catastophes? What is wrong with us Amercans? We are smarter and better than this.

the emphasis should also be on securing the underlying assets and helping home owners ( but not real estate investors)

The financial system, or Wall Street, might be off the hook for now, but the real economy, the Main Street where common people roam, will still have the same problems and government lending money is not the same as government helping people. Making the Fed Gov a big federal bank isn't different from private banking lending money, it just changes the institution to which the citizen has debt with. A real bailout would be one that would help the people with no strings attached like the one Roosevelt did.

Each day the US, EU and other govs around the world respond to bank afflictions and not common people afflictions is one bigger step towards the death of democracy in a society and the instalation of a ruling plutocracy.

Capitalism has crisis very often, wether they come from the financial system, oil, food, water and so on and it seems that every 30 years we have a real big crisis who sets the world into recession and population into unemployment, smaller salaries and bankrupcy of families and individuals? Who are capitalist trying to fool?

The card house of irrational exuberance finally implodes.

Peter Kramer rocks! You hit the nail on the head, dude!

Banks are run by stupid, greedy, idiots but at the end of the day they just did what we demanded of them – through our elected representatives.

They facilitated (almost) universal home ownership even for people who can't afford to buy homes.

Wouldn't one expect that any politician who, say, ran on a ticket of "universal Ferrari ownership, even for people who can't afford Ferraris" would be mercilessly ridiculed?

Well what's the difference? If you can't afford it, you can't have it.
Unfortunate but that's reality!

I think the bailout will fail because the underlying problem is that the housing market is still considered overpriced and no-one will buy or lend to buy in it until prices drop to a level that THEY consider reasonable.

How about using the cash to buy up all the banks on the cheap, instead?
Positively encourage short-selling, even lend the speculators shares with which to do it.

Say to them "please drive the price as low as you can so Uncle Sam can buy some great American companies at rock-bottom, fire-sale prices" and then support the companies with the full faith and credit of the U.S Treasury – You'll make a fortune, guys!

Congress did the only thing it could to prevent another Depression – at least for now, and this one would have been on a global scale.

Here is a shocker: lets put the blame where it belongs to: Main street USA. People who cannot budget from one paycheck to an other wanted to OWN property. Those of you who disagree, just look at the shopping cart of people in the lineup at the supermarket. 10-20 frozen dinners for $5-7 each.. cases of Coke.. frozen pizza for $7 each..How about COOKING ? How about RENTING a house/apartment and SAVING money for a downpayment ? Do not balme the banks, they are in the business of lending money...

I don't see anybody saying the plan will help. So I guess we are all in agreement! This buys some time.... and that's the only real benefit here... Folks this is a wake up call !!!! We as a nation need to show that we are worthy of the role of greatest nation on the planet or not!!! What are we gonna do about it!!!

Yes, we have lost esteem from the rest of the world.

Yes, the power of the financially strongest nation on earth has been greatly tarnished and is now questionable.

Again what are we going to do about it now!!!??

Now is time to come together and focus on America the nation we claim to love and are so proud of.

I am NOT Proud of:
– the US being the nation with largest deficit in the world... EVER!!
– Millions of qualified jobs being exported to other countries...
– Going to the store and finding that %99 of the products out there
are NOT produced in the US!
– I am disgusted that we DEPEND on foreign energy and goods!

It seems while Wall Str and the fat cats were partying .. and our politicians were busy borrowing money from upcoming nations something has happened. Its time to wake up and go back to the humble, hardworking, innovative and collaborative nation that made us so great!! What kind of democracy do you have when %51 think it one way and %49 another? We need unity and determination and need to realize that fiscal responsibility and TRUE patriotism .. doing whats truly good for America and not big INTERNATIONAL corporations is whats going to save us.

At this point we are not no shape to be policing the planet and quite frankly the weaker we become economically the less realistic this will be. And at the same time the more we loose our economical clout the less other nations will be willing to align with us!

Lets now set out to take advantage of the TIME we have bought and work with resolve to eliminate our deficit, use innovation and creativity to create products and Services IN the US that the rest of the world will have to depend on. Lets fix our problems at home regain our financial power once again.

Lets do it and not sit back till the funds run out again.!

I agree with Todd's statement in general terms. I believe that the bailout package is not the solution. However, I don't believe that the model of capitalism failed.
The problem I see is a cultural problem and wrong interpretation of capitalism. Capitalism is not about spending money you don't have.
People in the US (and increasingly in other countries as well) use to live well above what they can actual afford. Why ? Because society measures success by the size of your car or house. If people would care less what neighbors think about them and just adjust spendings to their particular economic situation, things would be different. I know that's polemic, and it's not going to change easily unless borrowing money is made more difficult.
The 700 MM bailout is a short term solution to the current crisis, but doesn't attack the fundamental issues at the root.

This is a tough one to take. Here in the Netherlands, for a long time it has been said that the market will not take the spillover from the US crisis, but here we are, pumping money into a bank that is facing problems.

To turn into the 'plan'. I think it is too late, but people have voted for a 'yes' to save what is left, this problem is too deep to solve with a plan of USD 700 billion. What is this based on, and what will it lead to? Yes, we know that there have been made wrong decisions in the past. To me it souds like a decison made by people that are desperate. It is acting cause there are trouble. And yes, losses of jobs, mortgages, bankrupt banks etc. But people are paying for it, lets not forget that. And is the money there for this purpose???

People are poor,they can not bring their child to the hosptital, BUT all of a sudden there is a lumpsum of money to pump into the system to create a better world, and it may sound a little too left, BUT lets not forget that this issue is created by individuals that thought everything was possible. But it is not. It is late, the problems are too deep to solve by just one plan. The stocks worldwide did not react by an upside. People still not trust the system. And that is what it will take to get the economy and the market up; trust in the markets, and trust in the ones that lead the system.

...And California want 7 billion because of tight credit markets and other states are grumbling about raising funds through bond issues. It seems like the demand for credit may quickly require additional resources. It doesn't seem like this will stop any time soon.

This bail out will not bring any lasting relief for troubled home owners, business and job markets. It merely underlines the absolute bankruptcy of Bush vodonomics.
It’s time to restore some basic ethics and values, and elect statesmen instead inapt of politicians that don’t look beyond the next elections.
Design a fair and reasonable tax system whereby the strongest shoulders carry the heaviest burden and stop bleeding the Country through ill conceived wars, short sighted foreign politics and a poorly controlled industrial military complex.
It is urgently advisable to engage the Chinese Government with its enormous dollar reserves to step in and help revive the economy, and help inject some necessary controls, since indeed, The United States has lost is moral authority as the beacon of free markets and capitalism.
This done, the USA will bounce back with a vengeance.

Someone should have put 'overturn Roe v Wade' in the bill just to see who urgent this bailout really is.
The fact that the bill needed all kinds of earmarks to pass, should be a sign that it is just the old "can't pay you, but can I put a little something on it". These congressmen who requested all these earmarks should be ashamed. But it also shows the true urgency for this bailout.

I am glad the oil price or stocks have not skyrocketted as of yet, after the signing of this bill.If they skyrocket on monday, then this bailout will be a huge failure.Whomever wins the election, o just say it, Obama will have one of the hardest presidencies ever.

http://money.cnn.com/2008/10/03/news/economy/house_friday_bailout/index.htm?postversion=2008100315

I love the last quote – it's priceless...they've already said they aren't going to pay current market for the homes – they'll pay an inflated 'fair' value...so basically taxpayers will buy at an inflated value, then modify the loan (in effect forgiving part of the balance) to a level the homeowner can actually afford – that's exactly what I wanted done with my money.

I need to find out if my congressman and house rep voted for it – if so I'll be voting against them next time they're up for election.

As the only possible tentative response left to counteract a very deep confidence crisis, the bailout was necessary. The crisis is a fact that imposes immediate real world actions and it seems that this was the only and last one available. Will it work? Let's hope it does. But this is certainly the last and closing piece (and what a huge one!) of a large and regrettable mosaic of "do-as-I-say-don't-do-as-I-do" lip service policies and actions that the US recommended to the rest of the world, while neglecting to look at its own backyard. And the once strong American leadership in the world has been severely and continuously eroded by the use of such double standards when dealing with domestic and foreign issues. As a foreigner with close ties with the US I can only say that America has been changing a lot in the last 30 years. Regrettably, the changes were in the wrong direction.

You comment that the Chinese model is better in some ways. China has a major problem in that its manufacturers make toxic and sub-standard products and bribe inspectors to pass the quality and safety standards. When they get caught due to people becoming ill or dying from use of their products the government does not fix the problem but suppresses information about it. This is a recipe for economic disaster because eventually world consumers will no longer trust Chinese products and they will go into a huge depression. America's freedom of information means problems come out in the openwith a lot of drama and legal suits but do get fixed. Its world customers know this and trust that American products with problems will get fixed. In the long run that is the recipe for economic survival.

Make no mistake, the bail out has been thoroughly reviewed by our president and its economic team so it is fully guaranteed to fail.

What elements of the Chinese model do you favor? Would it be the absence of democracy which almost prevented the rip-off passed by the House today? Free-wheeling capitalism. Would that be a reference to unregulated markets coming from someone who finds it difficult to utter the obscene "R" word? Actually that nasty "R" word is the foundation of the moral authority the loss of which you seem to be lamenting.

Realize that nothing has changed. Our society will go on consuming more than it is prudent to consume. Our business leaders will go on stealing more than it is prudent to steal.

It may have been better if it would`nt have passed congress so we all would have something we could blame things on....

what a waste,bailing out those who screwed things up,this horrible government we have could've handed out 1 million to each of us for a total of approx 300 million and it would've actually done some good...instead it's just wasted.

For one thing the bail out is the equivolent of taking an aspirin to heal a cancer.For another, the governments economics are not a standard to be followed.The 700b adds more debt to the 9.7 trillion dollars the US already owes.This is like one alcoholic asking another alcoholic for advice on how to stop drinking.It's obvious that a free market that runs free without honest effective controls, checks and balances will eventually get out of control. As is the case at hand.Nature has been successful for billions of years, because it is always in balance.In other words, the fluxuating value system is at the root of the problem. As soon as demand goes up, so do the prices of things. Yet the price increase has no bearing on the cost factor of the item. A perfect example of this is the recent events of the housing market that led to the current situation. Because there's no constant to measure the value of things.For example. Everyone loves summer time, but nature does not shorten or lengthen the season according to demand.It's duration or value stays the same.The free market system needs radical changes if it is to survive this test, or if it lives long enough to be tested again.It certainly is not a level playing field for all participants. As far as economic systems go, China is the economic black hole waiting to devour everything. It's only a matter of time. America and freedom are a wonderful concept and hopefully it will last forever. But, unless serious changes are made to the system, it's all in jeopordy.

I agree with TJ about the fallout of the Fanie and Freddie GSE (gov sponsored enterprise).

Here , attached the Greenspan's Warning in 2005 :

The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn't be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie "continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road," he said. "We are placing the total financial system of the future at a substantial risk."

What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

The bailout is a major mistake that in the long run will only postpone, and amplify, the inevitable crash. Without it we could look forward to a couple of years of worldwide depression, home repossessions, very high unemployment and all the associated pain as the bubble worked its way out of the system and sanity returned.
The US taxpayer will now prop up the existing system long enough for the rich and clever to fgure out how to avoid getting hurt too badly, but once they have burned through the $700bn, we'll be back where we started.
$700bn will buy us a longer, deeper recession later instead of a shorter, shallower one – painful enough in itself – now. It was a hard choice to be faced with, but the US has failed the test and taken the wrong road.
The facts are quite simple.
Some people should never have been granted mortgages.
The fact that they were greedy and dumb enough to take what was offered should not save them from foreclosure.
The people who gave them those mortgages should not have been allowed to pass the risk of their defaulting onto someone else.
The system needs to change to prevent banks loaning money they don't really have – borrowing to lend has to stop.
If you make the loan, you must take the risk. Home loans should only be made on the basis of deposits held.
Not everyone is fit to be a mortgage holder, nor is there an automatic right to a mortgage. If you don't earn enough to get a mortgage, tough.
Likewise all these bizarre 'derivatives' must be wiped out. You cannot sell what you do not own and have not paid for in the real world, and the same must be rigorously enforced in financial markets.
The way the markets operate has to reflect the real world, not some comforting illusion built on fantsay paper wealth.

Benjamin seems to be especially concerned about declining US authority internationally, but also about the declining integrity of capitalism. And that may cause him to exaggerate the seriousness of the current financial crisis. It's obviously big, but I'm not convinced that it means that what is an economic problem to be reckoned with will push the world into an abyss.

One of the things that commentators with the Great Depression on their minds seem to overlook is that it was different from the current crisis in what could be a very significant way: the Great Depression was a crisis of production that led to a stock market collapse and then a financial crisis, whereas this is a financial crisis occurring in a world where there are substantial growth areas based on productive industries. When the bubble burst in the 1930s, it revealed a world economy with little substance. The current bubble burst has revealed that there is a lot of capital sloshing around the world, shunning productive investment in favor of (supposedly) safer, securitized financial service plans that (supposedly) guarantee big profits with little risk.

I think that the big crisis facing us now is the crisis of leadership and confidence. What is striking is that through the past couple of weeks the entire summit of American society has shown that it hasn't got a clue. Paulson's plan is obviously merely a desperate move to get blood moving through the patient again. In every appearance, Bush looks like a rabbit in headlights. And Congress voted against the plan the first time for no apparent reason, and supported it the second time because the logic of "something must be done" was overwhelming in the face of there being no plan B.

Confusion and panic and dead-end thinking seem to be the hallmarks of this crisis. Moreover, the kind of panicky pessimism with which we are confronting and analyzing this crisis is very similar to the way we seem to view everything: with trepidation and a fatalistic fascination with the worst-case scenario: the comet hitting the earth. No doubt, the current crisis will provide inspiration for a new type of "I told you so" movies based on economic, rather than environmental, disaster.

Back in reality, meanwhile, no one seems to be able even to put the economic problem into any sort of meaningful context. For example, we're told that this 700 billion dollar bailout is incredibly huge; then we're told that it's way too small to do anything in a world of umpteen trillion dollars worth of "toxic" paper weighting down banks and investment houses.

In one column a teary-eyed pilgrim relates the heroic entrance of Warren Buffet with a three-billion dollar liferaft, and in the next column a doom-driven savant explains how Morgan Stanley alone is worth 30 trillion dollars in bad debt. The Congressional vote on the Paulson plan is "historic", but the plan itself is impotent. In some columns, economists explain in one line how bad the Paulson plan is and in the next line note that it is the only thing between us and the Dark Ages.

You would think that a crisis like this would spark some sort of heated debate about the need to really change things. Instead, we're getting politicians who promote themselves as the bringers of "change" while actually swearing off debate and priding themselves on being reach-across-the-aisle kinds of people and above partisan politics. It's amazing how anathema real clashes of ideas have become to us: in the Biden-Palin debate, the journalist even asked what the candidates were doing to overcome divisions and build consensus across the aisle in Congress. Far from being considered a sign of political and social exhaustion, the absence of real conflict between alternative visions of where society should be headed is assumed to be a good thing.

I think we need to question this comatose politics based on the presumption of there being no alternatives and even no way out, a politics which leads nowhere but to cynicism (such as the views that the current crisis is either the fault of Fat Cats or white trailer trash bearing mortgages they can't affort), disorientation and fatalism. There is enough economic dynamism around the globe to absorb this crisis. And the world is actually awash with factories and cash. The BRIC economies are really growing by making things, and that's good for all of us.

We should take a lead from the Chinese and Indians, who make money the old-fashioned way, by making things, because the problem is that when this crisis ends, if people with capital don't start investing in real industry, if we don't change our outlook, another bubble will just turn up somewhere else in a few years.

I hate to say it but i dont think the 700bn rescue package will have any effect in saving the honest working people of America. I believe most of it will end up being siphoned off into a deep black hole never to be heard of again. Politicians are the same everywhere – - have you ever seen a poor politician ? I dont think so !
It occurred to me the other day that perhaps the best way to fix this world wide mess is to simply wipe all dept from Joe Blob who lives down the road to all the countries in the world, and get back to basics and live within our means, after all when you think about it, its just numbers on a piece of paper. We would still have our homes Wall street would still have its banks and glass towers etc etc and it could all start again – - – - but i guess that will never happen as all they will do is prop up a system that doesnt work – - especially for the working people

I feel sad for the American people today. Very sad. Your government just took you to the cleaners and robbed you blind. Not even a peep of real protest from your elected representatives. I mean the fact that GWB was asking actually demanding this bill to be passed should of tipped you off that something was awry. As a Canadian my fate is pretty much tied to yours as we do so much trading together. Can't help but to think our own economy even with lots of the necessary protections and social nets to catch us when we fall is going to get hit. But; I still feel so sorry for the American people. 700 Billion tax payer dollars going to private corporations because they are in trouble. That sounds an awful lot like corporate socialism to me... or more simply fascism. And that is why I am saddened. Freedom in the truest sense of the word does not exist in fascist states or with fascist ideologies. Hope everyone recovers well But I do believe it is going to get worse before it gets better.

After this very bad hangover, I don´t belive the Bailout Bill is the imediate salvation, but every salvation needs a first step to get better. Imagine if the bailout didn´t pass through the second time, the financial system would caothic.

The credit market had already freeze around the world, even banks are charging a lot of interest from each other. We are talking about banks, not companies. Perhaps now, leverage positions won´t look so atractive as they did before.

The world lost trillions if we consider the markets value declinining positions in the last two months (USA, Europe, Asia, South America and Canada).

At last, I belive the markets will recover their positions as they did in all the crisis that came before (internet bubble, russian and etc.), and, if the money is well managed by US Treasury, there will be a light in the end of the tunnell, perhaps even profit for the US Government.

Seen the problem from an undeveloped country i can say that it is the consequence of the whole way of living in the States, every time i travel to the States i see so much assets on people that in my country normally woldn't have so much, it is ok that the life standard is different in terms of services private or public, goods, etc. but when it comes to earn and spend money the only country in the world where a person who work on an unskilled job has huge cars, huge houses, all kind of goods for living their lives as it if were a fantasy is the United States of America, and now this fantasy has become the worst nightmare of the financial "GURUS" and everybody, i strongly believe on capitalism as the only way to evolve to a better society, but common sense tells you if someone is able to pay his or her debts, and this commonsense is missing on the FINANCIAL GURUS of the United States Corporate Banks.

Well as far as I am concerned capitalism as we know it; freemarkets and Adam smith is long deid and burried with massive gorverment takeovers worldwide and especially so in the USA. Privatazation has been rolled back and we are looking and mutuelle management, not socialised because that also failed long ago. So the right mix is the only way forward. Fukuyama's truiphalism is long behind us and reality is setting in.
We failed to realise the human weekeness of selfishness, especially before bridered wealth and unfetted capitalism !!
America we so deeply love brought this on to us once again, simply because republicans like yeras before graduated in scare mongering and faulted debate sothat any one who tried to question certain ways was branded a traitor or un Amrican or American heater!! That is the problem. They changed American values of free debate and disagreeing without being dis agreable on its head and now there we are !!!

"The cost of the wars in Iraq and Afghanistan could total $2.4 trillion through the next decade."

(USA today http://www.usatoday.com/news/military/2007-10-23-wacosts_N.htm)

Imagine how would the US economy look like today, had the US limited its involovement in such expensive wars.

Perhaps it is high time for the US leaders to re-create the balance of external Vs. internal strategic objectives.

I'm glad the bail-out went through ,but fix what economy?
That only seems to run on credit,that means to put the problem to the future,so in the future we will experiendce it again.

It is not what they say a fix of economy, but just to keep running it for a while ,and then we'll find ourselves in even deeper depths ,because going on like we were, means that the enormous amounts of money keep on slipping away.

Like the contradiction,that environment is the issue right now,but the biggest amount of money is spent to further more kill and destroy the world.

With this money we could build the almost perfect society ,globally seen,by developing agriculture and alternative energy ,especially in those area,s that are not inhabited by any living creatures by using satelite controlled robottechnology and wireless transmission of energy.

I'm sure that the level of technology has reached a point that we can solve most of the problems ,strangely enough most technology is still only used to create problems.

So soon enough we will reach the limit for real ,when it is probably too late.
We made it this time ,but for how long ?

The money spent on security ,would be possible to use for prosperity and wealth in the whole world .
When we just would let the hostile attitute and paranoia,out of bad conscious,go and start international projects .And you'll see ,in no time ,with joined effords,we all could have a good life.even when you've been" bad", so to speak,doesn't mean you can be "good" in the future ,so no need for bad conscious.Just start being wiser.

I am not an economist and am not really certain if the bailout is a good thing or not. However, one thing is certain, so long as the American Fool continues to re-elect politicians that only think of their rich constituients and not the average tax payer, the only thing that will change is the erosion of the middle class. Wake up America! You have to stop re-electing the same Bozos that got us here to begin with. Yea, so your senator or congressperson got you a nice new road or hospital, but did they really do anything else for the community or nation as a whole? Out of 10 promises they gave you one or two and you are happy with that?

This bail-out will fail because simply passes the baton from sub prime borrowers to sub prime banks and now we have sub prime goverments and therefore sub prime countries, which can and WILL go bankrupt.
I would predict that the US, Ireland and the UK, will be bankrupt within the year and the Euro zone will disintegrate. Of course, should all this inspire China to sell it's stock of rotting US dollars then we will all find out who the real super power is...
Oh, and when this bail-out fails, where will the US go for a loan then , the Intergalatic bank of Mars perhaps.....?

unfortunately you´re right on the mark (i wish you were wrong – for the sake of all of us).

in fact there´s a fear out there that the government´s bill might dry up even more liquidity out of the battered CDO tranches than before. the argument is that a lot of potential sellers are holding off in an expectation to receive preferential (off market) bids from the government .

on the reverse side – here´s one cute accounting gimmick that might actually work in the system´s favor for a change: once the government makes a price to a tranche (doesn´t necesserilly have to be an equity tranche also termed as "toxic waste") – there´s all of a sudden "price discovery" – so institutions that have written all of it off (under IFRS or US GAAP) may reduce the provisions made – resulting into an (accounting) profit – just on mark to market considerations.

all and behold, even if the banks are left with a cleaner balance sheet, they still fear to lend out (especially on longer maturities) to people facing financial jeopardy and with collateral values going south. this is the same argument for the free lending frenzy, this time in reverse.

and now the last point (actually echoing one of yours): there´s little room for the central banks to lower interest rates – they´re already close to historical lows.

eventually the economies will converge to a new state of equilibrium, but the road will be long and painful.

In the Netherlands,the govenment bailed out two top banks,so far ist's simular to the American Economy.But Dutch people pay aproxx. 75% tax.The Dutch Economy actually is a moloch industry that runs on consumption slaves. that is compared to the U.S situation a very solid financial institute.As the social Democracy as they were in the past, they are used to Government business,as transport, medical care etc. The last 8 years a chistian-liberal democracy has privatized almost al the Pubic sevices.the Minister of finances,and vice-prime minister,is a socialist-democrat,from a social-democtats party,this was an enormous move to the left side,that nobody has expected,but considering the past,it was a logical one.

The United States needs a Free Banking System, and to put an end to the Federal Reserve. Only without a central bank can the financial markets be self-regulating; just the idea of a government backing bad investment increases risks and speculation. With a Free Banking System we will see hard money in the form of a Gold Standard.

Jonas, Sweden

As the mother of a young child, I'm against this bailout because it's unlikely to work and the next generation of taxpayers will be stuck with the debt. When many around us were buying expensive homes with no money down and sticking flat screen tv's in every room, we were renting a modest home and saving money. We tried to do the responsible thing and this bailout feels like a big slap in the face.
I haven't heard ONE "expert" talk about the people who didn't play a personal role in creating this mess. You know, just after 9/11, President Bush had the attention of every one of us....he could've said ANYTHING and he said CONSUME. He could've said anything!!! And he said go SHOPPING!! Then the fed and the banks made is frighteningly easy for EVERYONE to do just that. Is it any wonder we find ourselves here??? I understand the ways in which the demise of Wall Street can affect Main Street, but maybe it's time that we as a nation change our thinking altogether. One simple example concerning a very basic need of every person....the way we buy food. Don't decide what's for dinner based on a TV commercial or craving...go to the store and ONLY buy what's seasonal and local (or at the very least, grown in the USA). We've been shopping in the wrong order for decades in this country and that's one small thing that all of us can do that will help over time...

I am not such an expert as some of the previous writers here, but:
-Since the fall of the USD has been a major issue the last few years how come house loans in the USA become 'unpayable"?
-How is it so that with the currency taking a hell of a beating the last few years, assets floating down the toilet and Wall Street loosing its image printing 700 billions of new and uncovered dollars been a good idea?

They could print up 100 times more money for all I care, but the point will be how much of the country you could buy with each one. And unless there is a great new invention(colonizing MARS and extracting SPACE OIL for example) doable only by US/Americans this value would be much lower.
Sb mentioned scandinavia... Mr, please consider the proportions and consumption... It is absurd. Are you ready to sell Texas?
I am just curious to see where the money would end up taken from...
Good luck to all americans – every nation has its ups and downs. The great ones are those that can keep on. Be great.

who get the bail out? wall street bank account? (wall street is a market full of organization doing market so they will share??? ahahahahah? or some body else?
who is getting 700billions, and what this peson-society- or-else can do to fix the economy that the nation can not do?
Maybe the fat pig laughing in the front page picture???
And what about the families ?????
What about normal people who build up economy since it was created with sacrifice and salary spend in goods?
Those people we the people we build the economy!!!!
They should raise our salary and you will see the economy growing faster than ever!

(better to have 1 million people buying different goods, than 100 people buying only goods for rich people) this is for global economy.

I totally agree. This bailout package is similar to reducing interestrates in 2000, ie the US is unable to face reality and the consequences of their actions. This sounds to me more like communism and not capitalism.

Japan had a similar bubble and they were not able to avoid a prolonged recession. Even though their government had a huge surplus. The US doesn't have that. They will have to borrow it from overseas and pay high interest on it. So the actual price will be much much higher.

I think governments can prevent but not fix such problems. It's too late now. The only question is how long and how deep the recession is going to be. My guess is 5-6 years, 12% unemployment, interest rates up to 15%.

Here in Australia if you borrow and take on a mortgage you are liable for that debt even if the bank forecloses. Non recourse loans don't exist. One thing I think the US government should do is stop allowing people to walk away from the debt they have taken on.. By all means help them out with financial advise and tailored repayment plans but stop letting people walk away from debt without any consequences.
This US crisis is hurting the whole world and America is losing face.

Australia here, watching from a distance. I've followed the American follies since the first miss-election of Bush. I think that's when the rest of the world showed any interest in American politics too. Make a court jester the king and it attracts attention.

Most observations are intelligent .... ie ... the bail-out won't make a difference. The bail-out should be for those suffering loss of house, cars, jobs, medical, education etc, not for those still earning 10 mil a year regardless.

But honestly, I would hazard a guess that the majority of Americans need to feel the pain for a while. NOT the lower classes, but the middle and upper classes, which I assume make up the majority??

You consumers are the ones who are addicted to money. ANd it's you consumers who are destroying our eco-system, with your blind never-satisfied desire for more plastic, metal and wooden trinkets to play with.

You think your consumerism is giving you life.! Hah, but you're all still so miserable. You all consume with no regard for the rest of us on this planet. You gobble up precious resources from the ground like you're a child with no thought for anyone but yourself.

You pump poisons and toxic waste into the ground and sky, you spend what you don't have, encouraging your greedy bankers to take your whole economy to the brink of destruction.

The trouble with it all is, it is spreading further from your shores. But you's don't care. Look at Iraq, Afghanistan, Central America, Africa, Middle East .... you cause misery wherever you's go.

And now economically .... you boasted how great you were .... not just the bankers, but also you citizens, participating in the consumption, greed, climate destruction and debt. And it's spreading around the world, just like your toxic waste and your democracy.

The whole nation, as you know it, hopefully will never again be the same. You all need a good slapping, and hopefully this will give it to you. Spend the 700 billion now, why not, because when the next crunch comes in a month or two, what you gonna spend then?? I know, borrow some more!

Good luck, hope you crash and burn, only to rise again, refreshed, renewed and with a global spirit, instead of the selfish national spirit you ALL have now.

God bless who .... America or the World?

Your own anthem condemns you!

Don't know if it will avert a catastrophe, as billed, or not. I don't think anyone really knows. What is clear is the the bill the house passed today is worse than the one they rejected on Monday in that it contains $150B in pork barrel tax cuts. There may be some minor improvements as well, but it's clear that it cost the US taxpayer a lot of money to buy those house republicans...

Too much bad stuff is coming out of America...you all know what it is but nothing is done to stop it. The world has been seduced into over consumption and institutionalized immorality. Capitalism has and will work but if a nation allows runaway excesses the present situation happens.

We have been married over 50 years and what we could not buy for cash we waited until we could....guess what? We are are still happy and still debt free.

Sorry about you folks that came unstuck ...everybody is subject to greed it is stupidity that allows it to overcome .

"he who is content with the least is the richest"

to Chudamani Ratnam: What about all the money that the United States gives and "loans" to countries all over the world for the past lord knows how many decades?! I say the United States demands back all the money it's ever given/loaned to another country since WW2 and then there would be no more financial crisis!

My comment outlines an obvious point the Democrats are missing and I think undermines the "corporate tax cuts, stimulate economic growth" fallacy. My point is especially relevant in a recession. (In South Africa we effectively live in what the USA calls a recession, hence the title "Advice from Africa")

Advice from Africa:
Democrats should push the fact that cutting corporate taxes does not make companies profitable, which is goal number one. What will help companies survive, compete and in time become profitable again is investing in infrastructure and supporting R&D. The USA’s greatest strength is technological innovation and the rest of the world appreciates this. The most lucrative technological frontier is arguable energy. The Obama/Biden budget clearly supports this concept better then the Republican ticket.

At one point down the line, the US will have to realize that it will need to cut down on its military spending. I scanned so many of the other readers responses, some did allude to the Iraq war costs, but nobody seemed to point to this big gorilla in the room: the US can't keep spending as much on its military as the rest of the world combined. And if the US wants to maintain military domination, then we need to be ready and willing to lead spartan lives. But insisting to dominate the world militarily while enjoying comfortable easy lives will not work, it will be like wishing to have one's cake and eat it too. So the US kept this imbalance going by borrowing its way into a deep hole. When will someone start saying that the king has no clothes, and question the wisdom of US military spending?

The rescue package was 100% necessary, but fixing the problems that got us here equally so. Without any doubt, this crisis is a slap in the face for US financial policy and self-governance (none!) on the global stage. Attempting to completely deregulate our markets on one hand, but then attempting to govern our society with laws on the other, is fundmentally contradictory.

For example, the government's push to provide cheap finance for the poor was not a natural state for our markets. Our politcians thought they were being smart and politically savy by encouraging private enterprise to finance this "welfare" endeavour, instead of the public purse. If left to its own devices, the financial system is likely to have avoided such risky lending practices. Combining this type of "welfare" eneavour with a deregulated finance system has now proven to be tragically flawed.

It's unavoidable that we need to live by laws and regulations to protect our rights and govern our society, so it's natural that our "free markets" need to have the appropriate level of regulation to keep it all in balance. The inbalance in the policy and regulations between our finance system and other aspects of our society has been the fundamental problem. You can't have it both ways, as they say.

Let us all hope and pray that this rescue package buys us more time, but let us use that time to ramp up the level of regulation and federal control that is vital to improve our financial system.

If this bailout doesn't work, the global economy and capitalism as we know it will fall into the abyss. Heaven forbid this thing from happening. If governments and central banks cannot stop this crisis, then nothing will. At the very least, it is is worth a try.

$700 billion bail_out = same result – economic down! Financial system problem!
No wars, no crisis, Peace is better way.

I agree, The bailout does not fix the problems.
Young ambition and greed caused the problems, young "children" with their business degrees placed in positions undeservedly of power and decision making...cocky souls looking to stake their mark on wall street!!

Do u see any old managers who have learned from the mistakes of the past? no...

But in a sense we all are to blame the banks for the most part lending money out just as they did in the 80's as if it literally grew on trees, to those who they knew full well could not afford to pay them back.

The people of the country who want their "dreams" bigger and better who are willing to bite off more than they can chew financially.

Unfortunately when the stock market crashed in the 80's many of the high end managers were still in senior high, some junior high...In experience did play a part.

But one thing is obvious (and this is why the Government's Bailout was morally wrong).

When banks and financial institutions are irresponsible with their money to the point of near bankruptcy they beg the government for money and get it in the form of a tax payer funded bailout.

When the average "joe" is irresponsible with money the banks are not merciful, there is no bailout from the government, people lose their dreams, families, lives.......

No this bailout will not help...things sadly will get worse, far worse for everyone in the great USA.

Alan from the land of OZ..

What a tragedy and a great waste !!! The bailout should not have been passed.

It is a pity my previous comments (posted to political ticker) were not posted. Well here it is again ...

Wow! When first bailout was rejected, the world economy still survived and rebounded!

Really all this doom and gloom scare campaign probably perpetuated by those who dabble in Wall Street etc so they can continue to make more money.

There should not be a taxpayers' bailout. If a bailout is needed, get the money from those who have profited to the tune of billions of dollars over the last decades from irresponsible and probably unethical speculative trading activities. These irresponsible and greedy people/banks/financial institutions etc dabbled (usually not with their own money) as though they were dealing with monopoly money. They reaped the billion dollar profits when times are great and now that there is a self made crisis, they expect the taxpayers to bail them out.

Bailing out these irresponsible people/institutions will not guarantee that hardworking Mums and Dads, citizens and hardworking small businesses etc will not suffer.

Instead of bailing out these irresponsible people/institutions/practices, the $700 billion or more can be used to directly bail out any real hardworking people who may be affected. Any assets and corresponding future benefits of bailed out entities should belong 100 % to the country until all bail out funds have been repaid by the people concerned thus buying back the said assets. Under no circumstances should the taxpayers' funds be simply given out with no expectations of repayment to prop up insolvent entities which should not be trading anyway.

What a load of doom and gloom rubbish! The only doom and gloom that can be anticipated will be that people/banks/institutions will simply have to tighten their belts, be forced to live within their means and ratify their previously questionable trading practices and live with making lower profits from the general public. Prices of houses, goods, services and commodities will through demand/supply and people's inability to pay previously massive artificially inflated prices will also be forced to adjust to the benefit of all. Yes, there will be short term pain but the long term gain by all is worth it!

No taxpayers' bail out is needed or warranted !!!!!

Let me see if I understand the scale of the problem.

Some facts for validation please:
Mortgage based derivatives total about $15 trillion dollars.
Credit swap derivatives total about $55 trillion dollars
Consumer credit derivatives toital about $3 trillion dollars.
Is that a total of $73,000,000,000,000?

We intend to resolve underlying problem by applying
Bailout budget of $700 billion dollars?

To give some idea of scale of the problem:
World GDP is about $55 trillion dollars!!
US GDP is about $15 trillion dollars!!
No one can put a figure on the actual cost to correct.

How confident can we be that $700 billion can fix a problem which appears to be at least $73,000 billion dollars? The fix appears to be 0.96% of the problem! Is there still a missing piece to this solution?

Have I missed some news item explaining Mr. Paulson's plan?

I don't think the bailout plan will help. It will only lessen the long term pain, at least a bit, but at the end American people and people around the world will still suffer, painfully. The root of the crisis is the irresponsible rating system and the standard deployed by those powerful rating firms which gave AAA ratings on junk bonds and troubled companies. If the system has a fundamental problem, why can't we fix it from the fundamental issue: re-evaluate the rating system so that when a firm used to be rated AAA and that downgraded to let's say Baa, with the new standard put it back up to AAA, or Aaa in order to ease the liquidity problem.

I agree that the bail out won't work, but my reason is different.

Over the past 4 years we have seen the price of oil increase, without any corresponding increase in people's wealth or in the real GDP of the world. In short we have all been getting poorer. This is a reality I am sure that every single person will agree with. We all feel it.

As the price of oil has been increasing, the income people have received has not increased proportionally. Rather they have less money to pay their mortgages with. As the future cash flows of these mortgages have become more uncertain the current value of the assest decrease. (This is the subprime symptom, but not the root problem)

Business have also felt the pinch. As the price of oil increases certain goods are able to pass on the increase (for example synthetic rubber). But certain goods cannot – due to competition and the consumer which is poorer. The price of cars cannot be increased, otherwise they will just sell less. In short, the profit of business start to decrease and become more uncertain. This decreases the value of the stock. Also, business start to lay of staff, which increase competition in the job market, which keeps a cap on salaries.

The bottom line is higher oil prices mean lower asset values, less growth opportunities and higher risk for the investor. The investor will therefore demand a greater return on investment to compensate for the greater risk. This is the credit crisis we are experiencing.

Cheap oil = cheap credit.
Expensive oil = expensive credit.

America has created huge debt on the assumption that credit will stay cheap. The problem for America is that the interest rate on their debt has increased and they are struggling to service that debt. America could be going broke.

If this is true, the bail out won't work. You cannot solve a solvency problem with more debt. Any foreign nation that lends America the money for this bail out could be dragged down along with America.

If "Peak Oil" is occuring or then the long term price of oil (and therefore of credit) is much higher than it is now. this will imply that America will certainly go broke, as they are the nation with the largest debt. (Remember, this is compound interest we are talking about)

Welcome to high inflation and revolts once all the people lose the rest of their homes folks!

We all know the government can bail-out companies, so why don't they bail out the people, which are causing the companies to really fail? Because they don't care about the people.

The people are always to blame for this situations and everyday you can easily find an article and blogs blaming "poor" people for not living in their means. This ignorance has just killed our nation. It isn't the poor peoples fault when gas prices, food, and now tons of jobs are lost. How can you expect them to pay mortgages under these conditions. To top it off they cant even refinance because of the way these loans were sold and repackaged 5000 times.

Good job USA, I am ashamed to call myself a citizen of the free world. I am utterly disgusted at the lack of morals and understanding our society just displayed. I hope the people take back America for good.

I live in Australia and until the last couple of months our economy and stockmarket were performing very well, however, as a result of the unadulterated greed eminating from Wall Street it looks like our growth is also going to suffer but nowhere near the degree that you people are going to. We have a well regulated banking system that will stand up to the coming "meltdown" fairly well.
There is no doubt in my mind that there will be a world recession and just as the last recession in 1987 resulted from the "cowboys" in the US. I just ask one question, one that every American should be asking- When are your gutless politicians going to reign in this flagrant greed and properly regulate your financial markets? The most corrupt countries list is released every year and at least the countries topping that list are fairly open about it. Political donations in my view are a form of corruption and one country never seems to be any where near the top, but should be- think about it!

The world which was dragged along with the stupidity of the USA money system is also now dragged down by the same thing.
This event was caused by people, who clearly know little about valuing stck shares, or were reckless in the value they were prepared to pay. Both are commercial stupidity.
This event was caused also by gross over-valuation of residential property, when loan applications were made. A house is woth precisely $x multiplied by square feet. The land usually is somewhere near the true value it should be. When added together with chattells and possibly improvements, that is the true value of that residential property. Anything more than that is what someone is willing to pay to secure the contract to buy. Buyers usually forget that an agent is the sellers (vendors) agent and has a duty to get the most they can for a property. That is rarely what a property is worth.
What's the cure? Tell the agents NO! The general public must also stop being commercially naive. Make a web site with "tell the Agents No" as its title and get a national campaign going to stop buyers thinking ' that is what you have to pay for property in this location" "it's great value at the price" "we have other interested buyers" etc etc etc.
Meantime the general public of the other countries express our deepest sympathy for what is and lies ahead for the citizens of the USA. This is far from over. Think 5 years not 5 months.

We seem to be forgetting one very important aspect of this crisis.
Banks (and politicians) are only one side of the problem.
For many years many Americans have been living well beyond their means. The growth of the American economy has been based on an ever increasing consumption of foreign made products, all financed by debt, both public and private.
We cannot live forever on borrowed money. One day we will have to foot the bill. It seems to me that that day has come.

I do not approve of rewarding businesses for not doing their job properly. Absolute greed on the part of many of the banks should be punished, not rewarded. Likewise, people who lied about their ability to pay on a house loan, should also not be rewarded. It comes down to personal integrity. Have we lost it? I'm afraid that, as a nation, we are not the people we were 100 years ago, or even 50 or 20 years ago. We are straying away from the beliefs and moral code that guided this country's founders. I believe we, as a country, need to get back to that level of integrity, and the beliefs based on the principles of a Christian life.

It seems to me our banking system changed when, in 1999 (I think ) the Congress passed a law that allowed the banking system to package loans and sell them to investors, who then again packaged them and resold them. The result of this system is that the original mortgage holders grew less and less concerned about the ability of the people's ability to pay off their original loan. That is one thing I believe lead to decreasing the loan requirements. I'm sure there's more to it than this. As I said above, it comes down to integrity, both in the business world and in the government.

Reality chases those who don,t see it. For once USA is being hounded by reality- unfortunately, it still is not looking behind to see the "hound".- the belief that a "spend" economy has blown in it,s face but it continues to succumb to the spend more theory & propogate it.

Please, someone tell me, why is USA not downgraded by the "credit rating agencies" for it.s volcanic blow up,s when countries such as India get down graded for lighting a match stick (in comparison)?

The most convincing answer gets a prize.

Treating the symptom never addresses the cause. The world is looking to eradicate disease with money, yet it is only treating the symptom. You can never eradicate fear with money. The underlying cause of all illness is fear and selfish desire (greed). The same goes for the current economic crisis. The Bail out is medicating the patient, granted all illness whilst trying to identify the cause may well need medication to treat the symptom. Don’t make the mistake however of thinking that the treatment will eradicate the cause. The problem is that the True cause is once again far to 'Inconvenient' to all concerned. There is a lack of conscience on this planet, it is reflected everywhere we look. The need for more is greater than the Truth. Wars are fought out of deceit and self righteous indignation in the absence of love. Conflict haemorrhages money and perpetuates greed. Fear rules and all hide behind a lie. Best at perpetuating this lie are the politicians, and the financially empowered, lets not forget the self righteous 'morally correct' yet highly judgmental and intolerant religious leaders. America has become corrupt through greed; it has lost touch with its soul. This is wake up time. Look for the Truth in the actions of leaders not their empty words. Expose each and every one in powers hidden agenda for what it is. Free wheeling capitalism is enriching the few who abuse their positions of power just as Communist leaders abused their powers. The Billions required to save the people are lying exploded on the lands of other nations in defence of a lie, whilst indoctrinated soldiers and innocent people die. Basic needs are not being met as people lose their homes. There is blood on leader’s hands and oil in their hearts. Stop medalling in the affairs of others and spend the money at home, on American people and ensure our planet will be habitable for all our children and generations to come.

This has little to do with failed economics. That is just another symptom. Social conscience has been left to the loveless and morally self righteous. Love and truth have long been abandoned by humanity in the name of a buck and the need to control.

Hypocrisy is the cause and it is enacted through self denial, deceit, fear and selfish desire. This has just been an incredible and long build up of Hypocrisy manifested as disaster. All Crisis’s are gifts wrapped in problems. The hand that un-wraps them is Truth.

If you let Wall street fall, you will fall with it. That is why you need both the bail out, tighter legislation, and an end to all (costly) wars. What's more important that greed and evil will get punished, or that you can keep your head above water? Better start drawing your wallet before the price tag rises.

In the last few years the financial instruments got very complicated and hence this mess. 700 billion is substantial to stabilise the markets and good regulations will help prevent a repeat of the same. The savings of the world will be back into financial instruments as they need an income.

i mean what kind of neogociating was that from the senate they sure drive a hard bargin, but i believe that we as americans are used to not having a say in what our supposed government does were used to just trusting that theyhave our best interest at heart, only their best interest is all they have a heart for the republicans keep the rich rich while poverty in america is rising to the point that a worldwide recession is just begining. meanwhile the democrates create funding for people who dont want to get up and work but continue to have children, who learn the same behavior while the working americans take care of them to the point where old people who have probly slaved their whole life cant even get any social security. no!, this passed bailout was just another way for people to look the other way while something else more sinister is about to happen. you thought we had looters throughout katrina were about to suffer a great deal of crime and diviant behaviors from our fellow americans just because they are so hungry and have no place to live.

Posso deixar aqui uma opinião geral?

O pacote economico aprovado pelo congresso, vai sim ser de otima ajuda e dará um certo fôlego a crise. Mas tambem fica evidente para o mundo que existe uma falta de confiança no governo, em tomar atitudes técnicas para solucionar a momento dificil da economia, visto as varias modificações feitas no pacote para que fosse aprovado.
Torço sinceramente para que passe logo, e ao final de tudo isso a economia americana ganhara mais prestigio internacional.

I would like someone to tell me shat states/senators/congressmen benefited fro m all the pork that was added to this bill

THE GOVERNMENT OF THE UNITED STATES WILL GO BANKRUPT AND WE WILL BE OWNED BY CHINA. WHO WOULD BE STUPID ENOUGH TO VOTE FOR ANOTHER REPUBLICAN.?????

Instead of bailing out Wall Street maybe the 700 billion would of been better put to use by giving every household a half a million dollars instead. They could of used it to pay off mortgages, invest, buy healthcare insurance, pay for their childrens college and buy things to keep the economy going. Besides it wouldn't of cost 700 billion dollars.

This plan only benefits the already financially well-to-do. If that were not the case, they would not have acted so quickly OR been so concerned about things as they were.

Money is the root of all evil.

If the 'little guys' really mattered, our country would have been bailed out and rescued LONG AGO. Maybe things would not have become so dramatic... a 90-year-old woman recently shot herself, that should be a wake-up call.

They do not know what REAL hardships are. When one has not been through REAL hardships, one can not possibly understand. It's simply human nature.

A hardship to them is their 401K dropping, or their bank accounts over $100,000 suffering losses. A true hardship is having to live on the streets, or being permanently disabled, or being an abused child.

There are SO MANY other TERRIBLE hardships out there that need their attention, but those problems are never addressed. Focusing on those issues would not benefit them financially.

Money is the root of all evil.

I haven't felt as much anger in a long time as I have with the two House votes on the bailout bill. Nearly $150 billion was added to the cost; but, what was truly disgraceful, the added amount was a different type of cost – it won't be repaid.

I would like to see all the House bailout-vote "no" voters on Monday pay the difference in the cost of the bailout between Monday and Friday from their own pockets.

Or perhaps the blame lies with the Senate for adding the almost $150 billion of lard. Each of them should join in and pay for it. They are lucky to be immune from a lawsuit. To the extent either of the candidates are responsible for any of the larding, the other, or a third party candidate, deserves the presidential vote.

Many of our elected congresspeople have proven, maybe again, that they are no better than the wall streeters and remaining cast of characters responsible for polluting our credit system.

This current problem is nothing new for the US. What has happened to create this problem is exactly what happened to the US right before the Great Depression. The government, then controlled by republicans, retracted its oversight duties and did away with regulations regarding the financial system and let banks do whatever they wanted to with their depositors money. Now that's not to say that the Republicans are responsible. In truth, they're just lap dog facilitators for the big money interests in the world. So thats one of the underlying causes for this headache. Another cause is the fiat money system that allows banks to loan money out to people, corporations, and governments that they dont actually have in their possession. That fractional reserve banking practice has resulted in banks issuing nothing more than trillions of dollars worth of IOU's that can never be repaid. I heard on the radio from some Investment bank insider that the banks have sold each other over 1000 trillion dollars worth of Credit Default Swaps and Derivatives which are nothing more than bets on debts being paid or not. Now seeing has how the world economy only accounts for 60 trillion dollars a year it will basically take the rest of forever for this massive financial fraud to work itself out. That being said, 700 billion is not even remotely close to being even so much as a bandaid for this utter catastrophe. Its a giveaway to reckless rich people who don't deserve it. In fact, that money should be coming out of their pockets, not the taxpayers. If they were foolish enough to invest they're monies in untried and unvetted practices then they deserve to lose it all and be held accountable for the fallout of their decisions.

In the overview-mode it 's a rather strange situation ,because these bail-outs were already going on for a while before somebody started questioning what's going on! ,As if almost like being caught red-handed the politicians involved began to defend themselves, convincing the public about the necessity of these bail outs.So it leaves a big questionmark of what is really going on.what would have happened when nobody would have been questioning these deals?

In the overview-mode it 's a rather strange situation ,because these bail-outs were already going on for a while before somebody started questioning what's going on! ,As if almost like being caught red-handed the politicians involved began to defend themselves, convincing the public about the necessity of these bail outs.So it leaves a big questionmark of what is really going on.what would have happened when nobody would have been questioning these deals? I haven't put this comment here before,so no duplicate comment

With all respect, this is the worst Congress the U.S. had ever had. They proved time and again that they are followers and not leaders. They sleep on the switch and wake up in the middle (not even the beginning of a crisis). The long questionable decisions they made over the last 10 years or so stand witness for that.

As for the bail out package, who can really tell whether it is going to work or not when the magnitude of the real problem is not well known nor defined. There are many uncertain talks about subprime etc, but have we forgotten that a few weeks ago major insurance firms had to be bailed out as well, the same with the motor companies; or how about a few banks just a few months ago.

There is evidence that the problem is much deeper and this bail out package will be followed by other packages to assist in other areas, reminiscent with the cost of the Iraq war, where just before we forget about the billions which were requested to wake up on another similar request, And yes Congress will grumble for a few hours just to show they that they exercised some resistance but sign for it anyways.

Now as for the consequences of the bailout package, there has to be a dire one when the government feels free to reach and pull that magnitude of instant cash out of the hat or thin air. Many failed governments and financial systems suffered a terminal fate when practiced this behavior. Did any of the representatives really study the effect on the purchasing power of the dollar or confidence in the currency when it gets created on a whim like this.

The country needs leaders with the caliper of George Washington and the other founding fathers. The current administration, congress, senates, and unfortunately the Judicial branch are wandering in the beaten path and lost the main CALLING of the United States of America, May God bless America and provide her with wise leaders as He once did.

I live in the east of Europe. I am feeling that the fear of bank sector is not truth. Thea are afraid of their money and, therefore, they ask for our money (it is not important where it is , the banks and big companies ask for financial "help" from governments), really, it is not help, it is simple gift, soon X-mass gift from the governments, unfortunately, it is paid by us, taxpayers. It is not regulation of capitalism, it is stupid socialist solution after decision made without any responsibility. Sorry, Mr. Bush, but you will give gift to the very rich subjects. In reality, in competition, if somebody will make fatal mistake, he will be in bankruptcy process, no forgiven, no excuses. I read that european automotive companies ask for "help", too. They want to substitute responsability of their not good results (big cars, high consumption) by money of all taxpayers. It is not capitalism, it is modifaid exsocialism, and I know very well what it is. Any crise is good for cleaning of environment, even if it is very difficult for people. Bail-out is only postponing of cleaning process, next cleaning will be much more harder.

It would be nice to hear political leadership speak to the changes we need to make as individuals to improve the economic security of our nation. As individuals we would be better off in the long run to decrease our consumption, decrease our debt, and build savings. This, however, this may be exactly the wrong thing to do for our economy in its current state.

We have been focused on what the government and Wall Street can do. What can I do?

Where are your genius managers now? Where are your Nobel Prize winners and economists who sell books all over the world and preach to everybody how one should behave? Where are you going to kill thousands of people in your robbing war now as you have never had any other way to pay back all you spend before you can possibly earn it? Is it possible that thiefs who lead USA have come to the wall and now they must put their hands into pockets of own citizens as there is nobody else to be "pickopocketed"?

The first thing to do would to close down the Federal Reserve (FR)
The Second thing have USA Govt Print the money instead of borrowing it from the FR
The Third get USA out of the IMF and any centralized banking cartel
The Fourth revise the Banking Act / Stop the banks ability to Fractionalize Bank Lending
The above would also apply to England and the Bank of England

the bailout offers little help for homeowners
this is the biggest joke to ever happen ...how could this pass and not even help the homeowners...3 years ago my house i could have sold my home for 300.000 but today i cant even sell it i was told all could get is 160.000 for it ..That will not even pay it off...so what should i do ...ever mouth i go more and more in the hole ...and my bank is not going to help.
I lost my old job ...but im very luckey and I got a new one but now I have to drive 130 miles everday to work....and the all my cost are going up but not my pay...I can not belive no one is going to help the homeowners who work everday and are going to lose everthing
They vote to help the big guys but not the working homeowners

The bailout does not adress the core problem and thus will not work. The core problem is the american consumer who needs to be deleveraged. It is just not sustainable in the long run that such a small population consumes 25% of the worlds energy on Credit, buys double everything on credit, runs its goverment on credit and so on. It would be a painful lesson and would hurt economically, but for our childrens sake and the future of this planet, extreme consumerism like the Amercian way of life needs to be extinct.

First, nine/eleven, second, Katrina, Now Wall street.............WHAT WILLL BE NEXT ? Is someone trying to tell us something ?

Of course, now everybody is speaking and giving is reason why this.
But nobody saw it coming.........SO WHAT 'S NEXT ?

Are we going to lessen or are we going to keep going that way ?

To "Wake-Up-Call" Your concern about how much Afghanistan and Iraq war COST: there are approx. 15,000 people killed each year on USA highways as a result of drunken drivers.. And 100,000 injured.. I am no expert in cost analysis, but would bet a lot of money that those 15,000 deaths and the 100,000 injured COST MUCH MORE . And of course, not just $$, but the suffering. The solders (with all due respect to their family ) who die in Iraq ARE professional solders.. and PAID to go to war. See definition of SOLDER in Webster Dictionary.
I wonder why everyone (leftist media and fellow travelers) are so much worried about the war in Iraq.. COST ? Drunken drivers cost more.. Human Life lost ? Drunken drivers kill much much more THAN ANY CURRENT WAR ..
In summary.. I remember watching a few years back a USA gov. ad on TV against drunken drivers: they showed a picture of three children , a toddler, a 2 years old and a 6 years old.. all look the same.. all from the same family.. THEY WERE KILLED BY A DRUNKEN DRIVER.. Think about it.. It is something WE can do about it.. Like in Sweden, for example: first drunken drive ofence ,and your car is pounded and you go to jail for two weeks..

To "Lou" Giving every US citizen a half a million dollars.. Hm, So they would "pay off mortgages, etc" In what world are you ? Most of them would spend the money on drugs, booze, frozen pizza, Big Mac, cases of Coke.. as they do NOW.. Your idea was implemented in Eastern Europe after the second world war.. Lands were taken away from their owners and everyone was given an equal parcel.. Five years later, some people got 10-15 parcels , (because they worked very hard).. some had only 1 parcel (they worked only 8 hours a day).. some were in debt of 15 parcels.. (most of them spent their time drinking away, not working etc..) So your theory was tested and FAILED.. After a while, they took away the parcels from those who worked hard .. That is called Communism..
Reading these comments I see how most of you are in the cloud.. Had HISTORY taught NOTHING to you guys ? Communism.. all that .. No country was able to implement that system.. all failed.. Do you guys read ? Or just go to the university library, wearing your CHE T-shirt .. Hello ?
By the way...This is NOT A BAILOUT of WALL STREET..(as presented by the leftist media) The USA gov. BUYS all these troubled corporations at a very LOW cost and if all goes OK .. in 5-10 years taxpayers will not only get back their money but will make a PROFIT .
Yes.. but you guys will not be around to debate.. You will be discussing other important issues, like "if the ice melts in the Artics, the sea level will be much higher.. hm, Archimedes taught us otherwisw.. But that is na other subject I will be talking about soon.. :-)

I am from New Zealand and though we are a long way from the USA we are experiencing the first signs of a recession here. Higher unemployment and banks unwilling to loan . We are so similar to the USA. We outconsumed ourselves with overspending and logging up credit willy nilly and now we are paying for it. House prices have dropped 10% this year and another 20% in te wind is forecast. That is when it is going to hit us real hard. Construction is grinding to a halt as well.
Our society is heading for a big change with less consumerism, more saving ...a return back to the days of thrift which is going to take a long tme to bring about. A recession will help us return quicker. We are learning now how to return back to the good old days where every household grew their own vegetabls.
We have had about 25 finance companies collapse in the last year and the finance companies were driven by greed. So Wall street is not alone with its maverick out-of-control overpaid entrepreneurs creaming $ off Main street.
Its either greed or fear running these institutions......now we all are going to pay the price of fear for a very long time.

Seeing someone protesting the signing of the bailout plan with a sign saying "Just Say 'No' to Socialism" has prompted me to write this. Having lived and worked in both the US and now Germany, I find it unfortunate that so many Americans view any alternative to pure, laissez-faire capitalism as somehow dangerous or even evil. After seeing communism, taken to an extreme, fail, we are now witnessing the weaknesses of capitalism when taken to an extreme.

So just how "dangerous" can it be living in a country which is not driven purely by capitalism? Consider this about Germany, a social market economy. Out of a German paycheck, roughly 46% is taken out for taxes and comprehensive health care. Real estate taxes are a few hundred euros annually (a pittance). Here is what we get in return. Roads are in excellent condition (I have not seen a pot-hole in the years I have been living here). Day care costs roughly 250 euros per month (and the government is considering to reduce it to ZERO). Health care is excellent, requires little paperwork and costs little or nothing (our daughter had convulsions and after emergency care treatment, an EEG, 4 days stay in the hospital where they put a cot for me to sleep next to her and fed me too, the only bill I got was for 10 euros to pay for the ambulance service). University costs roughly 500 euros per semester. We have 30 days paid vacation. Cities are generally safer and cleaner than in the US. And we are able to avoid feeding our children genetically modified food. Needless to say, we like it here.

Now compare this to the US. If you pay 36% federal taxes, add state taxes averagíng around 4% (not all states impose a tax and the range of those that do are anywhere from 1% to close to 10%), plus real estate taxes and the cost of health insurance, then Americans are effectively paying the same percentage of taxes as a socialist economy. True, salaries and wages tend to be lower here than in the US, but there are also not as many destitute people as in the US, either. (By the way...while not as many people make 7-digit salaries here, plenty of people drive on these gorgeous roads in their Porches to their second homes in St. Moritz or the Côte d'Azur during their 30 days of vacation.)

Also consider this: With higher salaries in the US, shouldn't the US government be collecting more money per person, enabling it to give citizens more in return? Instead, the money is being used to finance trillions of debt (which they can never pay back, but if you say that too loudly the dollar would be worth what it really should be, which is zero) for a war which nobody really wanted and now to clean up a financial debacle created by capitalism in its extreme.

Part of why we don't mind paying high taxes in Germany, a social market economy, is because we feel that we are getting tangible benefits in return on our tax euros spent. I wonder if that American with the anti-socialism sign feels the same about his tax dollars.

The bailout will create more problems and will solve nothing! We can now look forward to greater and more prolonged pain whilst the irresponsible perpetrators around the world continue to reap the billion dollar profits, courtesy of the American taxpayers ....

Well ... what do you expect when you have greedy, self interested economic illiterates (George Bush, Wayne Swan, Kevin Rudd etc) running countries around the world?

Save the environment and your pockets by spending less on unnecessary goods/services, don't pay exorbitant prices for anything you can or cannot afford, work (don't be a parasite off others) and live within your means, live smarter (use alternative energy including solar/wind domestic systems, alternative transport eg compressed air vehicles) and more sustainably with what you already have, look after yourself, your family and your country first before you interfere with other people's countries ... and you will save yourself and the world ....

This is the guaranteed solution!

"High rollers" have gotten away with grand larceny one more time.. Until the taxpayers unite in a concerted effort to demand automatic prison terms along with surrender of ill gotten gains for the offenders, "wrist slapping" will continue as a form of punishment.

Millions of Americans have watched helplessly as their retirement funds, their jobs, their homes, and numerous other forms of savings, etc. have been wiped away by these modern day "Robber Barons'.
all under the guise of smart business practices.

We seem to ignore history, the depressions of the 20's and 30's were a result of the same shennagins as today's fiasco.

The "bailout" is just that. The offenders are bailing out of a mountainous mess and will continue living in their grandiose life-styles with no remorse, no trips to the wood shed, no public apologies, no asking for forgiveness.

Again, we have allowed the Foxes to guard the hen house.
This time we must demand their hides!

The bailout will help the investment companies in the short term and will help the American in the long term, as long as it can be implemented orderly. Government should keep free market mechanism but also should correct it when the market failure.

i just read through, i dont know...a hundred??...people all saying the same thing. "boohoo, this plan will hurt me and i still won't have any credit.

WAKE UP PEOPLE!

the real reason we are in this mess, besides the war and gas and wallstreet greed, is OUR greed! We culturally strive to live beyond our means, we get bank loans and credit cards and "buy" things that we know we don't (and never actually will) have the money to pay for, so in order to live like the big rich rockstar that the t.v. box tells us to, we have to go out and get another bank loan or credit card to pay off the previous one(s). NO ONE SEES A PROBLEM WITH THIS?????

countless countries worldwide have done well for themselves without the "benfit" of people making THEMSELVES poor and blaming others for their own stupidity and/ignorance. the market now thrives only on us using money that we dont have. remember way back when, the banks would give you a loan, but if you didnt pay it off in time.........they took the value back in, what? that's right kiddies....the item you were "buying" and the other stuff that you owned! now they try to, but instead we got too many lawyers and whiners complaining that it isnt their fault they acted so foolishly...."yeah, i did it, but they LET me do it! BLAME THEM-PUNISH THEM" use these fancy computer devices and go back and search for the unsecured loans and whatnot, those people, take their stuff....the ones smart enough to use collateral.....give them a break. we all know that in order to make this bailout work, that we are gonna have to make up the money somehow....TAXES OUT THE YIN-YANG! maybe not now, maybe not for a while, (cause that would be too obvious) but eventually, a loaf of bread will be $20, gas and oil (cause not everywhere offers those neat and nifty "green" services) will be $$$bajillion dollars a milileter, and dont even think about trying to have less than 13 full time jobs per person in your household...

see the idea here? stop using dough that you dont have!

thank you quite a bunch, and good day to you all.

they say it's a liquidity crisis. they say banks don't lend to each other because there is no trust anymore.

shouldn't the most efficient reaction from central banks and governments be simply to guarranty all short term loans between banks – instead of this expensive and unsatisfactory bailout plan ?

because they will never be able to replace the huge flow of money that was circulating between banks.

and of course amounts guarranteed should be limited to the amounts "usually" lent during normal business with strong sanctions if these banks try to use it outside or beyond this frame.

don't you think ?

Could the bailout have been prevented if banks and credit card companies simply reduced the exhorbitant finance charges imposed on the consumer?

Just a few thoughts as I sit here in the lobby wating for my flight to Oslo.

What I know about human nature and businesses can be put in a timble. The veiw from the timble is very simple. I would not lend money to someone who is in the same business as me and has made the same bad mistakes that I have. This is where the banks are today.

They have used the owner's (shareholder's) capital and other loan capital and shuffled it into assets that are not going to pay out the dividends that they were expecting. They have a choice. Wait out the storm by throwing more money at it so that over time the loans come in good. Or cut the losses and if necessary go under in the process.

Whilst going under sounds like good punishment and almost attractive accountability, the scope of the squnadering has been in the housing market has been enormous. It unleashes so many tragedies that we have to think one more time.

When we look at the plus side of the bad loans equation, It has given homes to many who otherwise could not have aforded them. Many of these people are only asking for breathing room and fair repayment plans. Why not give it to them?

Isn't that what a benevelont parent does when one or all of his children make the same mistakes? The parent here is the govenrnment and should take charge of the companies temporarily by agreeing to recoup his cash with profits over time. But also, the parent should recognise that he needs the children to go forth into the world, a little wiser but also bravely. Regulating them to stay at home is not the answer, a kind of a balance is needed. But most all time and breathing space is necessary to quantify, lick the wounds and get back on their feet. After all for the parent and the government the only real pleasure is when they see their children prosper.

I think over time, we will see the banks back on their feet. The only revenge we should exact from them is that they get back on the right path and make sure that they do not make the same mistakes again. We do that by making sure that those who can meet a fair level of repayment gets the help and breathing space they need.

As part of the hard-working American middle class, I do in fact have a simple observation to make. The jacked-up price of housing is to blame. Prices had to fall form their impossibly high platforms. In Arizona, with an average yearly family income of $37,000, how could carpet bagging greed realistically expect monthtly payments on homes averaging $200,000? The math does not add up, as any 5th grader could tell. Most families struggle and juggle to make ends meet, but it's simply not possible. Credit cards are are not a viable solution: Virtual Money never is. So, don't look here for a bailout! Your middle class is already over-drawn!

There is no doubt that there were people on Wall Street that overleveraged on mortgage-backed securities and other high risk investment instruments. However, there are so many aspects to today's global credit crisis and the people on Wall Street cannot be the only ones taking the blame.

We have a case where Wall Street is blaming the catastrophe on subprime mortgage defaults whereas people being affected by foreclosures are blaming the guys on Wall Street for being too driven by greed and labeling them as ‘predatory lenders.’ Did anyone put a gun to their head to get them to sign off on their variable rate mortgages? I doubt those people took the time to even read the fine print.

Some people on the forum are even blaming this crisis on rising gas prices. This is a ridiculous statement to make. Gas prices did increase substantially since 9/11, but I cannot fathom a scenario where gas prices could have become so detrimental that they would cause a foreclosure. It is a remark on the level of someone having foreign policy experience because Alaska and Russia have a narrow maritime border.

While it is very saddening for the people who have experienced a foreclosure, the bottom line is that those people who took out subprime mortgages were in precarious positions in the first place. They miscalculated as much as Wall Street and while no one ever deserves to be in a position like they are in, they should admit that they acted irresponsibly by not ensuring that their mortgages were something they could truly pay off. The fact that many of them are only finger-pointing doesn't bring about a solution. Moreover, if they are going to finger-point, they should get all of their facts straight because our government actually encouraged subprime lending through Fannie Mae and Freddie Mac. So, Wall Street was not entirely to blame.

This bailout is not about saving the fat cats on Wall Street. The US is faced with an economic recession. Manufacturing jobs are moving overseas to more competitive nations. The financial sector was basically our only opportunity of growth and the bloodline of an economy that would otherwise be more quickly overtaken by emerging nations. If Wall Street fails, our entire economy fails. If our economy fails, the global economy fails and it is as simple as that. Voters who are threatening to vote anyone who votes in favor of the bailout bill out of office are not only being unreasonable, but are digging their own graves and everyone else’s graves along with that.

Everyone must understand the implications of a Wall Street failure. Our government was too slow to react. When Bear Stearns collapsed, they should have taken immediate action to calm the markets. I’m not saying that the bailout is the best solution, but at this point in time, it is our only solution. Confidence in the US economy has been eroded to such a degree that it would probably take years for us to recover.

There are also underpinnings of socialist and communist ideas expressed by some people in the US. The fact that there is an allusion to China’s economic model being more stable than the US economy is incredibly scary to me. Don’t people realize that the more government regulation there is, the more future complications there will be? It is just like the child who rebels more because his or her parents are so strict. An interesting note is that Fannie Mae was formed about the time of the Great Depression Era, where our government intervened to try to reform economic policy. See where that led us today.

Why should there be a bailout then? Primarily to rectify the mistakes of the past so that they do not hinder our future as well as to stimulate our economy so that confidence in our financial system is once again restored.

In today’s bailout, after the lessons we’ve learned from the Great Depression, some of the steps we should be taking:

1. increase FDIC insurance to full amount of cash holdings
2. improve liquidity – once credit lines shrink, business and growth stop
3. prosecute anyone on Wall Street that compromised their ethics in this whole ordeal to ensure that history does not repeat itself – not only should they be heavily fined, but they should also be imprisoned
4. ensure that any legislation pertaining to the financial markets do not inadvertently cause future problems
5. stop all the partisanship. There is no reason that corporations cannot grow alongside the middle class. The government should encourage growth for both.

Again, I’d like to emphasize that the people who have had their houses foreclosed do not deserve this. However, I do not agree with measures to bail people out of foreclosures as it encourages people to view themselves as victims of circumstances rather than empowering people to take control of their circumstances. Moreover, this sort of bailout has a socialist / communist undertone. Once we open the door to such bailouts, there will be no end to further handouts. I do not want my taxes financing someone else’s home when they clearly couldn’t afford it. I haven’t made the rash decision to buy a house because I know I can’t afford such a commitment at this stage in my life. People need to live with the consequences of their choices, good or bad.

Why do I agree with bailing out Wall Street and not Main Street? The people who are being foreclosed are in a bad position undoubtedly. However, if we do not save Wall Street, the ramifications are just too dire to begin to contemplate. So many residents in America’s top cities are directly or indirectly employed by financial institutions, which indicates that if not contained, the problem could get much, much worse.

Mortgage-backed securities have unwittingly become Wall Street’s atomic bomb. No one knew in advance the devastation this instrument would cause. Now that it’s been unleashed, we need to do whatever it takes to restore credibility and prevent further damage.

I think that it makes sense that if we need people buying these homes and start infusing money into the system, then the US government, at least for the sake of the taxpayers, should encourage wealthy foreigners in buying US homes by providing visa incentives. (Obviously there must be conditions, such as, down payments, criminal backgrounds, etc.)

But for the most party, I think it makes sense because we need to attract more capital and money. With less homes with bad mortgages, the US government can sell them to domestic and foreign home buyers at a rate that would not hurt our deficit further.

With more people buying homes, this can help reverse some of the damage of this crisis.

What do you guys think?

What this country needs to realize is that we need to bring the jobs back into the country! The big US corporations need to stop the outsourcing of manufacturing and other service jobs to countries such as China, India, Vietnam, etc. If you've even tried looking for a shirt in the local malls that is Made in USA – good luck ! – you won't be able to find one. The USA has bank-rolled the prosperity in China, India and the other countries in that part of the world. Think about this – the decline of the US economy is our own making – we have shot ourselves in the foot! The jobs have left Main Street – US corporations have taken away the jobs of their own customers! How can they expect the US consumer to buy their goods and services when the customer's job has left the country?

The bailout would probably work if it were coupled with a freeze in healthcare cost. Runnaway healthcare cost has finally caused
an erosion in the middle class standard of living. Subprime
mortgages were simply the first kind of debt to go sour. Other
forms of debt will soon go sour, as well. The bailout, as it now
stands, addresses only the first symptom of what happens to
a society which can no longer afford its healthcare system.

I have never had a credit card in my 30+ years on earth, had a spouse sent off to a war that obviously is a great waste of money several times. And yet we the working class is having to bail out the rich, by paying more taxes. Giving a cool million to every american household would be a much cheaper bailout, that could actually work, the people would be able to pay off loans, which means the banks would get their money. It seems like elementary math. But it wouldn't be America if the rich didn't get richer and the poor get poorer. I just pray for all the families that are truely in need of help and wont be able to get it. Money is the root to all evil. God please bless America especially the working class.

Bail out pakage can only work if implemented correctly and buying out sick assets will not solve the problem.

There are two problems.

1. credit freeze – that can be solved by government acting as aclting as a clearing house guarnteeing transactions between banks aad thier customers. Ofcourse cdredit risk must be in place. For this guarntee they should charge commision of say 0.1 % and use that money for insuring the transactions.

2. people not being able to pay mortgages because of bad contracts – house owners must be allowd to renegotiate their mortgage contracts so they can afford pay and keep the house. Value of the mortgage should be reduced to the level that existing occupier 's affordibilty at market. rate. Loss in reduction of capital should be born by the bank that provided the mortgage. If the owner sells the house then the profit should go to the bank.

- last but not the least crimnals must be made to return their bonuses to compensate the banks.

I thin

It looks more like wall street is taking the taxpayer's money and running.

Coger

My concern with the bail out is the addition of "pork bellied spending." This additional tax reliefs cost many Americans millions of dollars of taxable revenue. The major question I have is, "What's the real difference between bribery, extortion, and "pork bellied spending?" 1. Bribe: Something, such as money or a favor, offered or given to a person in a position of trust to influence that person's views or conduct. 2.Extortion: Illegal use of one's official position or powers to obtain property, funds, or patronage. I think it is safe to say this bill wouldn't have passed without the "extras" that were placed in to gain additional votes. If elected officials on Capital Hill utilize their positions to include personal agendas that affect the consideration of voters for future positions in the house, then aren't those members passing "extras" to help with re-election? I am sure these officials will mention their additions to the bill when running for future offices. Will these businesses (Race tracks, film Studios and movie companies, Rum manufactures, etc.) be able to provide aid for future campaign contributions? It sounds more like padding pockets and making friends than saving a dwindling economy.

References
1.bribe. (n.d.). The American Heritage® Dictionary of the English Language, Fourth Edition. Retrieved October 06, 2008, from Dictionary.com website: http://dictionary.reference.com/browse/bribe

2.extortion. (n.d.). The American Heritage® Dictionary of the English Language, Fourth Edition. Retrieved October 06, 2008, from Dictionary.com website: http://dictionary.reference.com/browse/extortion

So what happened with the wonder's the 700 billion doller bailout of Wallstreet was suppose to do. Last week when the house refused to pass the bailout the news an all involved blamed that action as the cause for the 700 pt drop in the Dow Jones. Then when talk's recomenced and the Dow Jones came back up and down it was all blamed in part to the atmosphere coming out of washington. Saying that what was coming out of washington determined the markets reaction. Well, with this bailout plan scared into approval what do you believe the market now thinks of the plan. Or are we to just wash it over with the old "It takes TIME to see CHANGE". Well sirs the american people have just about ran out of TIME and patience. Secure the Base ( The people) then we'll decide what institutions deserve to be held up by US!!

I have said this before and will say it again. Why is no one calling for the individuals and or groups of individuals responcible for this disaster not being hauled into jail and infornt of judges? These people had to know the extraordinary risk they ran with the CDS program they invented? Why are their assets etc not being siezed sold to help mitigate these "bailout" cost? I know if I were to default on loans, mortgage etc I would be hauled infront of a judge and my property siezed and sold off to pay those debts. Why am I to shoulder their burden?

No I believe it will make it worse. Once again the rich get to save all thier unearned money and get bailed out by our lame government. But I time will come. We will rise and unite this country again, even if it means war. Government had better heed the warnings and start doing the job they were elected to do. Read the book Government Choke Hold and find out how we could get energy independent, how we could retire wealthy, and how we can improve our schools and get health care. Great book with a lot of great ideas, find it at Huff4president.org and check out the links on his home page.

Hey Guys, Just listening to these CEO trying to get out of responsibily as heads of their companies. Unbelievable. Im a small business owner, "the buck stops here"! Why dont they finally become fine Americans and give back some of that 90million to pay off the 700billion loan? Putting there money where their mouth is! How about giving 30million back to pay off the loan? Then the rest follow suit for the good of the country. The Chris Cox's and the rest of them!

Of course the bailout package wasn't going to fix the problem. All you have to do is read the first 40 pages of the bill (which is available to anyone with an internet connection) and you'd easily come to the same conclusion I did. It's obvious our elected officials either did not read the bill or just plain ignored what it contained. You be the judge.

I don't believe the recent 700 billion dollar bail-out will do very much good for the overall US economy or for that matter, the global economy.

I think that this is the opportune time to let the markets just play themselves out, and in their place establish a new economic system.

Perhaps we should look to our past to figure out where we go from here. I for one believe there should have been some market regulation all along, because if left to market and psychological forces, this is what we have today – a freefalling market with a depression that is sure to follow.

I remember the old adage, "history repeats itself, only the characters change" (or something to that effect). So here we are again, at the beginning of another Great Depression.

During Lehman Brothers congressional hearings today, Rep. Henry Waxman, D-Calif., chairman of the House Oversight and Government Reform Committee, said the giant investment bank was "a company in which there was no accountability for failure."

I hope Representative Waxman realizes his company (the US Govt) is the most shining example of no accountability for failure.

I am a foreign exchange student from the US, currently living in Bogotá, Colombia. Why is the dollar doing so well against the Colombian Peso, regardless of the financial crisis the US is facing right now? In the past three weeks, the percentage change is around +6.4%.

The number of jobs lost and unemployment percentages are a faulty non-representation and lenders, including large lenders know it – so do other countries that are dependent on the US consumer economy. That is why they aren't going to lend. Unemployed people are not going to be able to purchase the orders that loans might pay to deliver.

The bailout did nothing good and will not solve anything in the credit markets or anywhere else except to hire favored firms and friends to manage these worthless assets. It will not insulate the markets nor businesses from them.

In the international community, the only thing that the US really had going for it was this ideology of free market economy, capitalism and representative government. By doing the bailout, the world has watched those be denounced and disavowed by US leadership. It is irreparable now that they've done it this way.

The sooner that these "fudged" employment numbers are corrected, the sooner a set of real solutions can have reason to be enacted. The rest of the world does know, lying to American people and business owners does not help. The current situation is not a "bear market" doing what it always has done. This is different than anyone has ever experienced.

There is no way to correct the damage our government has done, pushing through the bailout package as they did. Socialism of the losses shouldn't have even been on the list of options and our real solutions that are available were on the table to use. But the choice because of what, became either this bailout in its offered form or nothing?

It looked like President Bush meeting with small business leaders today, was genuinely shocked and embarrassed by the outrage he encountered there about the bailout. How could he be surprised?

Well off course the bailout package will not fix the problem immediately but what i think it will do is start generating confidence in the markets which could be the beginning of the end of the crisis because only if there is confidence in the markets will there be lending, buying and selling and so on.

What is a bubble? What is value? How do you define the intrinsic value of an asset? Isnt an impaired asset a liability?

Personally, i m convinced that this situation was inevitable. There is no need to blame one sector of the economy for this situation or bad mortgage loans. The outcome of an experiment is dependent on the nature of negotiations carried out by the experiments defining rules and the spaces within which those negotiations take place. Let me make bold to say that despite any road that was traversed economically this outcome was unavoidable as long as the fundamentals as questioned above have the answers that they currently do. In a crises of confidence assets will assume the minimal intrinsic value possible which in some cases, for some classes of assets, may be zero.

Asking about the bailout?
What happens to a hurricane when it passes over warm waters?

Bubbles are created from the interactions that take place within complexly evolving organizations (CEO). They are created by the periodic negotiations that must take place when a competitively constrained self-organizing ensemble negotiates with its constraints.
There are only 2 conditions required for the generation of a bubble and they do not include speculation or uncertainty. Bubbles are necessary for the self organization of organic matter to form life as we know it. In other words, bubbles are natural.

Economics espouses the idea of an intrinsic asset value. This intrinsic value lies within a sometimes unspoken set of assumptions. These shared assumptions create a structural coupling and a shared dynamic that depends on the 5 principles of organized complexity. These principles give the shared dynamic form and temporary sustenance. The result of this temporal form is what we call a bubble.

The formation of bubbles and other unmentioned phenomena describe a K-pattern. A K-pattern is the signature confirming the existence of a complexly evolving organization.

Just as the clouds surrounding Iraq haven't settled yet, the credit thing is too big to be judged already. I hope the 21st century has more to offer than catastrophes. What ever happened to the New World Order? It seems indeed, dear Todd, the U.S. is loosing this battle.

what we are witnessing is a new lesson in economics. we have all learnt about value creation, distribution and consumption, but what we didn't learn is the fact that creation plus distribution is not automatically equal to consumption; herein lies the fundamental problem with contemporary global economics... today competitive intensity continues to increase at an exponential pace, this in effect means that creation i.e. supply-side is increasing exponentially; it assumes and anticipates that consumption will follow in order to complete the value cycle to deliver return on investments. however, the problem is that in our current economic paradigm this is not happening. this is because each of us have a finite capacity to consume, I believe that today our collective capacity to consume is dwarfed by our supply-side capacity... this results in warehouse upon warehouse of unsold goods, and hence failed investments. competitive intensity has broken through the comfort threshold where f% of investments fails in order for s% to succeed... I believe that today we have gone past that threshold and now f+c% of investments must fail if s-c% is to succeed; where c is a factor of competitive intensity... it is the essense of capitalism, what was not expected is a rate of change that now makes it impossible to generate profit... this will only get worst as the rate of change increases and will continue to so infinitely. this is now unstoppable as the intenet has ensured that the "supply-side menu" presented to everyone of us is as infinitely long as it is diverse; driving consumer choice to its highest level ever and counting. that consumer choice is proportional to competitive intensity; this highlights the need to maintain a fundamental quantitative relationship between creation and our capacity to consume (given the size of our stomachs and 24 hours in the day)...there is no way to solve this, except to increase our capacity for consumption... but this is impossible in first economies, choice is out of control; now it is ironic because the only remaining untapped capacity for consumption is in the third world... wouldn't it be funny if the answer to the crisis was to "feed the world". Afterall this crisis proves that there is value in owning a capacity to consume!!!

Government, your politicians setup this domino effect. Fannie Mae, Freddy Mac, Iraq(or I mean Bush/Cheney oil war), high oil/gas prices driving up everyday living costs. So no, I dont believe there will be much trickle down effect from this "bailout". It's another opportunity for the politicians to grease the hand of their richie-rich buddys

America we all rich poor middle class will have to pay for the dilemma of the few. Is it right NO, yet. WE are in competion with the world. So tighten up and AMERICA needs to build companies in the US instead of investing in factories with enemies who can turn those factories into war hogs with US dollars. US LISTEN TO ME YOU CANNOT PROTECT AN INVESTMENT IN THE EVENT OF WAR SO KEEP YOUR DOLLARS HERE AND IF YOU DONT IT WILL BITE THE NEXT GENERATIONS TO COME IN THE BUTT, NECK. GO BACK TO A FEW ISOLATION TIPS FROM THE OLD DAYS. FACTORIES MILLS HARD WORK A GOOD DAYS WORK WITH THE TECHNOLOGY. WHO CARES IT COST A LITTLE MORE ITS OURS AND IT SHOULD BECAUSE ITS OURS. THE WORLD DONT WANT IT SO WHAT WE WILL KEEP IT FOR OURSELF TO CONTINUE THE FLOW OF AN ECONOMY IN CASE OF ACCIDENTS SUCH AS THESE. AND EVERY COMPANY DOES NOT NEED TO BE ON THE DOW.

Until the Government realizes it works for the American People instead of the American People being tools and pawns for them to step on on their way up it won't matter.
The American People pay for the discovery of drugs and medical procedures yet when they need them they are out of luck.
Congress should put a freeze on their pay raises for the next ten years. That's how long it took them to raise minimum wage wasn't it yet they received 9 pay raises during that time.
It is the attitude that the American People are stupid drones that has caused this.
And of course, greed.
Until we have the Universal health care(which our forefathers have already paid for), controls on interest rates including what the IRS can charge, etc., etc., etc. and they start investing our money instead of allowing it to be wasted, they can do any thing they want and it will still end up the same.

I hate to say it, but i told u so...Listen, ladies and gentlemen, the end is near. No $700 Bln is going to save n e body but the ppl who authorize it. If the government just paid off the bad loans and structured a payback plan with those ppl, it would cost only a fraction of the amount that was assigned to 'help' with the credit crunch. You have an opportunity to decide the country's fate in november, but thats also what u thought in 2000. Like one american told me on saturday in buffalo, "now i know what its like to be an iraqi under saddam hussein". I was a little shocked but i mostly laughed because of the irony. Tell me, 5 yrs from now if the US is like iraq under saddam hussein, who will invade and 'free' the ppl? the french? the brits? russia? china? india? or another country that hates the USA? just like the same ppl who hated Iraq......All this talk about becoming green for the future. About eco-friendly stratagies that will save the planet for our children. Whats the point of clean air and a blue sky when u wont be free to enjoy them?? I did a little research and figured that this economic plan started like 16 yrs ago or so. With the signing of NAFTA and the push for the 'NEW WORLD ORDER' and now with the PTA on the horizon (Pacific Trade Agreement), or founding industries dont stand a chance so how can the local pizza shop? When a company like IBM can thrive after aiding the nazi's in the concentration camps, how can the auto companies survive even after building military equipment to help defend freedom all over the world? Some one is allowing these weird things to happen and we all know deep down inside who they are!! As the years have passed, we are all taught key words that put a litte or more fear into us. A brain washing/mind controlling technique. Here are some of the words/ phrases....
-BAILOUT
-TERRORISTS
-TERROR ALERT
-ATTACKS
-AL QAEDA
-BIN LADIN (who hasnt been charged with the events of 9-11)
next words will be...
-MILITARY STATE
-NORTH AMERICAN UNION
-BUSH IS BACK (thats a joke....i hope!)

On closing, just another thought for you all.

Why is the price of oil dropping like bombs in Afghanistan when the demand is high, especially in the south east where there is no gas? The excuse they use is that the refineries are not up and running so the oil inventories are high. Are we really that dumb to believe this?

I want to know how is it Mr Paulson gets to select someone from a failed company like Sachs Goldman to run the newly created office of financial stability. That is like putting the fox to stand as look out over the hen house. They both are from the same company and that seems like a conflilct of interest. Clean house from the top down.

"MISSION ACCOMPLISHED" THE RICH GOT RICHER

Until we can get rid of the "something for nothing" philosphy that has penetrated our society we will struggle to survive. Everyone can't keep thinking in shallow materialistic views. Learn to love your neighbor and treat everyone as you would want to be treated. If not, our nation will not last.

No the bail out will not work, if Americans don't wake up to market manipulators.

Possibility of middle-eastern manipulation of stock market: buying up and selling down stratigies.

Humour me for a moment.

If I were an oil rich hostile middle-eastern group. Then, if I had unlimited funds to purchase stocks on the US stock market. What would the possibilties be, of actually attacking America through their stock market.

If I were in such a group I would buy, buy, buy US stocks across the board.. I would continue to buy up the market.. On September 11th it would be agreed that everyone would sell, sell, sell everything they had in US stocks. As the market began to crash my group would celebrate as it caused everyone else in the market to question their position in the market and they would also begin to sell, sell.

The next day my hostile group would buy, buy, buy stocks at much cheaper prices; every stock across the market. My group may let the market stand on an up side for a day or two then again I would sell, sell, sell and crash the market again, and again each time buying in cheaper each time until I would own wall street and control wall street and the US economy.

I think it is a great time, the best time for ordinary Americans to buy, buy, buy into the stock market.

I suppose time will tell although it's very heartbeaking that it had to be this way. You get these dishonest people catching a break and getting BAILED OUT.
Is the help going to be there for the people who are honest and hard working? I've been one that has had to live on a budget all my life, but keep honesty in my heart.
Something in America just don't sit right when it's the people that are greedy and dishonest are the ones that get all the help and the honest, hard workers are ending up with the short stick.

I can't wait for the lawmakers who passed the bailout bill to start crying: "I was misinformed by my esteemed colleagues on this issue. I was assured that if the government was restricted by law to only purchase worthless loans and securities with $700 bln of newly created worthless paper that we could rescue the American economy. And besides, we only added $100 bln of pork to the bill. How could that hurt? Why, if the American public was educated at Harvard or Yale they could comprehend the full extent of our accomplishment, thank us appropriately, and start buying stocks."

Love or hate Wall Street, they’ve already placed the appropriate value on the government’s action: less than zero.

This multibillion dollar bail out will make this crisis worse, because the pork barrel spending already tagged before it was passed. This is obviously in collusion with the interest groups. Better name of this package will be multibillion sail out of America by the legislators. After so many bankrupties by the big financial giants, the legislators' greed has not stopped the credit card companies to send a pre-approved credit card application to 4th and 5th graders. This subprime loan, push for the credit cards without income verification, 0% mortgage by the automobile industry is well known to media, but as a tag team the media doesn't raise this question to general public, rather media will bring the CEO's to tell the general public that our economy was strong till the day is collapsed ( 100% lies). Media will be happy to bring these so called Pundits from big financial brokers to say that our economy is slowing down, or the stock market is just correcting, housing market is somewhat slow because of large inventory and so on so forth. Suddenly the crisis comes to bail out the banks with pork barrel spendings. Hopefully, the media will wake up someday to bring the truth.

got a letter from my bank today. Informed me they did not have Fannie or Freddie or invest in any of the securities in question. I'm a nurse, just a working stiff and am trying to pay my own bills, not someone else's. Got rid of the boyfriend that ruined my credit, wish I could say the same for this country right now.

Who is going to spearhead the fixing of this mega problem ? It goes far beyond the Banks and their bad loans. It's about the Derivative Market and all the Pension Funds who bought gimmickery that no one understood. The totals are staggering in their enormity. They make the 'bailout' look like chicken feed. WHO got the money at the top of the Chain ? And where is it now ? THAT is the money that should be returned to the unsuspecting buyers of such worthless garbage.

I worry what businessmen will think if Obama wins. America is already at such a disadvantage from a business standpoint. I wouldn't blame a small business owner for packing up and moving operations to a place where the environment is better for business. What can you do? Fire your ignorant american workers and move your business. Its becoming the smart thing to do! If americans cant see what taxing the the movers and shakers does they deserve to whatever they get in a sour economy. From where im standing its common sense.

Why doesn't the government just give 700 billion dollars to the 300 Million Americans. I don't know much about finances, but if they added some stipulation that the money could only be spent on products in the United States, that would completely allow for the economy to be fixed.

What if more potential defaults emerge and $700 Billion proves to be just a tip of the iceberg, and US government runs out of money to carryout further bailouts? Can anyone imagine the consequences? Wouldn't this scenario make 1928's Great Depression look like a small recession?

American comprises groups of people who are beginning to trow away religion, my guess is that the percentage of less religious citizen in comparison to the groups who observe religious beliefs is dwindling and that makes the former becomes the majority in the US.

This statement was true for countries that have gone out of history, such as the countries that became the lost civilization of the ancient world.

In all lost civilizations the simple reason for them to go down was because their citizen became greedy, ego, and had lost faith to GOD, or thought that they are GOD.

The Bailout just seems to be okay with those who hiked prices of everything and made money as there was never any financial constraint on them,however the common man was taken for a ride in this giant wheel of booms in capital assets.
Why does not the United Nations being a body of experts on economic as well as social issues have a say in this whole scenario wherein people from all over the world are affected?
Let CNN take a poll on this issue whether americans will really benefit from this bailout or not?

For much of my life, I thought this quote from my late Father, the author James Atlee Phillips, was merely his cynicism showing, as was his comment about the stock market being a "Rigged game", but the reality is showing that he was right. The quote was thus, "We will see the tops blown off newer volcanoes than Paracutin, and every society in the Americas changed most violently. You could be a scribe of that change if you so desire, but never forget that in your lifetime, you will see the dead hands of the Krupps, the Alleman, the Rothchilds, and the Rockefellers, ripped off the throats of the peon, as he leads his charcoal laden burro into Leon, before dawn".

This bail out is a big joke, It's only going to help the very rich.
We allways talk about middle class, but their our lots of poor that are hurting. Middle class & poor our hurting.
When are we going to bring our troops home and stop loosing
Lives and Money. Hey Smart Guys in Congress that 's no brainer.

Sara Palin go home John Mcain let's talk about the ecomony

The bailout was only good for the boys on Wall Street, their rich living and their million dollars homes, and fancy cars. Fine Dinning and they don't have to worry about the gas as the pump.

Thanks President Bush for an outstanding yo have done in the last
eight years.

It can be said that this bailout package is the worst solution except all the others that cannot be tried.

The rescue pack may address the short-term symptons and provide stop-gap relief. Fundamental problems remain and long term solutions required.
In SIMPLISTIC terms, one cannot allow a system whereby 1 real house can be transformed into trading on1 real house plus 999+ pseudo-houses. Along the transformation( which is done by selective & smart groups,) cheers by influential people were added. Selective accessibility to the international markets by such groups allowed excessive greed to abuse weaknesses in the system. Under the guise of market liberation and efficiency, false liquidities were created, leading to bubble and disaster. Whole world suffers as a result...sad
For Past financial disasters, one common trait is “OVERSIZING ” to a point where indisgestion took hold. Valuations of positions become elusive targets and Market-to-market becomes mark-to-disaster. Coupled to this, complexities of some derivatives are not easily fathomable, even by experts. Hence most management s are usually “lost” and find themselves in tight spots only when its too late.
Such situations usually prevail because "short-term" Profit Reporting agendi are usually the key business drivers.
Derivative trading is essential for market definition and plays important role. However they should never become the dominant over-riding force in the market. They should always remain “DERIVED” activities, supporting the physical and real business activities, and the Exchange Futures markets. It is on this premise that the proper OUT-OF-BOUND markers should be set-up to minimise future abuses.
There are other such weaknesses in today's free-market systems, especially in the commodity markets. More time-bombs/bubbles are in the pipeline. If we dont take steps to rectify them, more disasters are likely to occur.

Anyone who would like to know how this economic crisis came about, should see this history of events shown in a youtube video. Go to youtube.com. Search for " burning down the house ". There will be several videos listed. Click on the one called, " what caused our economic crisis? V2. It will be a very informative ten minutes. I don't know why the major networks woulld not give us the facts. I would dare Anderson Cooper to prove disprove this information. I bet he doesn't have nerve to touch the truth shown in this video.
Watch this before you vote.

No, No, No the bail out of an inflated 950 billion dollars will evaporate in probably less than one year. Let me explain: Americans consumption of oil is 9 million barrels a day, at $93 a barrel that money will be gone in 3.1 years. Now take all the employee salaries and overhead to run the business not to mention the dreaded CEO salary, payoff the bad debt and we’re broke. One year maybe two if we’re lucky. The government is so stupid to think this band aid would work. For years they have been saying energy independence, but because of lawyers, environmentalist, and the fact that our government doesn’t want cheaper fuel because they will loose tax revenue, and you can see why it hasn’t happened. So when you vote this year it doesn’t matter who you pick they will only get one term, because things are only going to get worse. http://www.huff4president.org/

We be screwed.
The only benefit of this enormous bail-out...is to protect the interests of the wealthiest among us–at the cost to all.

All this does...is create a garage sale clearing house for the junk paper in our banking system.

The real results of government intervention–is a psychological boost to foreign investors–and US shareholders–but ignores the bigger issues of: lack of individual/government savings, over investment by smaller bank chains in the bonds market, lack of liquid assets–anywhere in our financial system–including the federal government.

Thanks you dolts.
You've scammed the U. S. taxpayer–yet again.

I think it is a very interesting article that points out how difficult this world crisis really are. It is a difficult topic and I think there will not be one alone thing that will help. The finanical markets all over the world needs to figure out how to do business that most people understand and can rely to. I think the way to pointed out forward by both new regulations and back to basic for the financial companies. All this shows that most countries in the world are connected and needs to trust and improve their relations further. Cheers Molldal

I have read a book. One that I feel, along with numerous other americans feel, that will help the economy. So far I cannot imagine why neither candidate has not even uttered a breath about a system called the Fair Tax. It would pretty much just about fix our economy overnight, and make the U.S.the free corporate tax market in the world. Why? with the economy the wy it is is this not even getting mentioned at all? Is every politician in the U.S. that moronic, to not even consider the Fair Tax as a good idea? I mean c'mon now let's let the working class people bring us out of this. Give us a shot at fixing the economy. Have a brain and pass the Fair Tax!!
P.S. It's the right thing to do.
Sincerely, Eric from Johnson City,TN

As I mentioned in a previous blog Makets functioning is based on an algorithm, one of the necessary variables is cash flow.
I still maintain that the bailout was a necessary move to save Mainstreet because the time that Wallstreet would have required to come out of this on their own strength would have put too much strain on Mainstreet.
For Mainstreet it is good that the government has intervened with this bailout package, however if we want to go the way of making Wallstreet responsible for this mess then the buck cannot stop there.
Financial institutions should now be forbidden to hoard money as they are doing. I think it is annoying that this appears to be an overlooked factor, I find relevan and crucial to consider.
If Financial institutions themselves don't have have confidence in eachother than why should anyone else.
Money is a Financial Institutions business so they should get the job done or get out of the business of money.

Look at it from another simple point of view, what's the use of any government pumping money into the system if the banks – the medium – are going to sit on it?

Everybody is talking about lack of confidence, how to restore confidence in the financial market. And what are the solutions they propose? Bailout the crooks. Are the CEOs and the people that cause this mess in jail? Or paying for the damage they caused? NO, they are enjoyng their wealth and laughing at us. And they want us to trust the system so more of them can take advantage of us? Until they cleanup the system it will be impossible to regain confidence. WE DON'T TRUST ANYBODY. We see in everyone, a potencial crook. My solution is simpler. Bailout the common Joe, show him/her that lessons have been learn, that crime doesn't pay off (go after the fortunes that were made on this).

You people are just amazing. By "you people" I mean most of the mainstream media semi-pros who have been shoving "crisis", "disaster", "global contagion", etc. down our throats since the beginning. You have been fomenting the increasing distress over this entire issue. If there was only a fraction of the deluge of sensationalism about this, people would likely be panicking much less and not adding to the problem. Once upon a time, for the first year and a half, CNN was the leader in real news reporting. By the 2 year mark you started cashing in on sensationalism and have been going south, ever since. It's nice to know that, as this economic "crisis" is happening, CNN is shoveling in the profits off of it.
The congressional hearings are a joke and will continue to be a joke until they start putting every United States President, Vice-President, economic/trade Secretary/Commissioner and Congressman/woman who has served for the last 20 years on the stand and ask them why they stood by and did nothing ... and made money ... just like the corporate giants. The corporate boys didn't make their millions by doing anything against the rules or laws established by the congress and trade commissions. It's not their fault that we allowed faulty rules. All of the politicians for the last 20 years who never fought the standing rules, Republican and Democrat, are just as responsible for the current situation. But they will never point the camera at themselves, will they? Sadly, I don't think CNN be brave enough to do that either. It's just common and weak. Try to be better than that.

You want to be part of the solution and help the American people?:
1) Start taking all of congress to task for allowing this.
2) Push congress to make the maximum allowable interest rate to be Prime + 5%, across the board, by law.
3) Push congress to create an oversight board to review, quarterly, all banking transactions.

THIS COUNTRY NEEDS MCCAIN!!

Please, someone tell me this is not true,,

AIG got in this situation by knowingly making and hiding bad loans. then ,AIG was given 85 BILLION OF MY MONEY, then went to a RESORT and spent 440,000 of MY MONEY on lodging, food and drinks?
Why are these people not in JAIL?
Kathryn in Arizona

Anderson, this is my first time writing on a CNN Blog! By the way let me say I am a huge fan of you Anderson!
Money! Money! Money! Where can I start? Pretty big topic nowadays! I will make short and get straight to the point:
1. USA must bring back into business and bailout Lehman Brothers Holdings Inc. immediately; same approach USA saved AIG.
2. USA must protect these companies perhaps by also offering a monetary bailout package:
a) Morgan Stanley
b) CITI Group
c) Wachovia
d) EBay (which now has already began job-cuts)
e) Wells Fargo & Co. (This one I think Warren Buffet has it covered)
3. USA engage immediate financial dialogues with other world giants even if it means with Venezuela and/or Iran as I see some powers preying on and sabotaging this situation
4. USA (including citizens) must respect and trust its Secretary of Finance as the Senate trusted him when he was sworn in.
5. Obama and McCain must immediately stop politicizing this situation because they are both right in my opinion; Obama will bring food to the majority of people by his tax plan while McCain will help the above mentioned giants to keep people on payroll
I am not an Economist and/or a Politician Anderson – BUT I have good analytical concepts for problem solving. Put this up for discussion before your Panel Anderson!
I view the above as an immediate and long-term solution to this chaos.

This is serious!!!
Adam Mwanza
Zimbabwe (currently in Omaha, NE)

This is not a Bailout, this is BS...........While Congressional panels are grandstanding for the American people and are so called "Grilling" the FatCat Wall Street excecs about there abhorent self enrichment give aways, they have done the samething with all the 300+ million dollars in PORK attached to the to a bill that was suppose to deal with the so called finacial crisis!!

When are the American people going to wake up and see the light!! The Same FatCats have for years sent an army of Lobbyist to give away millions of Dollars in "Favors" to the same people (Both Democracts and Republicans) that are supossed to be representing the People......But instead, our representitives represent only Dollars that come from these RATS!! Nobody just gives money away for nothing!!

WAKE UP AMERICA.......WE NEED CHANGE ALRIGHT.........WE THE PEOPLE need to empty the halls of the Senate and House and get to the real cause of all this BS!!! We need to boot them all out of office and demand they return to what our great forefathers intended........a government that represents THE PEOPLE!!!!

I am impressed with an e-mail that has been circulating among the folks; here it is: Why not take $85 billion and divide it among every America citizen, figured to be about 200 million. That would give each man, woman and child $245,000.00 each. The govt. will get back about 33% of this and the rest would surely go to paying off debt, purchasing and stimulating the economy. The fat cats could get the stimulus checks cause.....we wouldn't need them.
Does it not make you wonder what we (the people) could do with $700 billion?

I think the powers that be have become myopic and self serving all over the world and in all facets of life .The worlds economy is thriving on superficial commoditites and hypothetical futures ! Stop being creative about finance and start trading on nuts and bolts .The only people benefiting from speculative non existent investment are the rich while the poor are getting poorer. I am neither a socialist nor a communist but I do believe that governace and leadership should be grounded in real values and moral societal structures.

I heard expert economist being interviewed yesterday saying that they did not foresee this – I was shocked .I am not an economist and I have seen this a mile away .The western lifestyle's greedy desire for more energy consuming activities with no regard for the cost is appalling in light of the fact that the western world considers itself to be educated.

Why cant the drivers world wide drive < 2 L cars especially the US drivers who insist on driving 4/5/6 Litre guzzlers ???

I like that Mr Obama and Mr Gore stand for real change underpinnned by real values .CEO's and CFO etc need to adopt responsible and unselfish motivation for leading Public and Private institutions – they are way too motivated by incentives regardless of cost !

Regulators worldwide must make people in key areas of responsibility accountable for bad decisions that are financially motivated. The consequences of bad decisions result in deaths and serious illnesses – are they any less guilty than murders ? yet murder / manslaughter carries up to a death penalty.

Lets get back to moral living with simple value systems with respect for all of mankind .The current situation is a direct result of mankinds greed for power and money.

the bailout needs to happen to save the world from itself but if is not accompanied by the lesson to be learnt by people from all levels of life especially the so called leaders – it is a wasted initiative .

The world keeps getting opportunities to redeem itself but never seems to take the opportunity to make meaningful change .George Bush Jnr was the worst thing that happened to the US – lets hope the US does not make the same mistake again with a palin / mccain election.

What we see nowadays is a continuous flux of money from Stocks to US Treasury buying US Bonds like way to protect fluid money made virtually by this modern Economy mixed with real money too. That way like we are now completely global interconnected this could be a no ending flow. Did you do not think that closing partially this door by new rules from Treasure it could make money stay in Stocks and Finance Banking System and that way preventing a terrible collapse?

The $700 Billion bailout didn't work as planned after 1-1/2 days, so Bernanke has the Fed go directly to the short term credit borrowers.
Paulson & Bernanke do not know what they are doing – get 'em out-a-there ... include Bush and Congress while you're at it.

All of the commentors don't really admit that they are part of this mess...it is ironic.. he-he-he. They are all denying and blaming somebody else.

It is like drugs...banks HOOKs everyone of you on DRUGS called "CREDIT". Using your credit cards and bank loans...this means YOURself as the collateral.

That is why in our place we only use micro-financing...we are hooked on "smal time credits".

Your solution – Borrow some more...use your credit card more!!! It is the fundamental solution for the crisis. Better get part of the 700B loaded unto the system now.

What a joke. After hearing that AIG wasted nearly a cool half million on at "retreat". I hate to say it, but, Mr Obama said it straight. Make them give the 85 Billion Back and fire the fools. What's changed? The rich got richer

Are these guys kidding? The Brits are trying to lay blame that the US didn't act fast enough? Where were they? Where was Japan? Where was China, Russia etc, etc,... Here's how it goes, they sat back wanting to see the US market tank so pompus to think it wouldn't affect them & then when it did, AS USUAL, "...Oh it's the Us's fault"

Now WE ALL SEE!

We all remember the movie with Michael Douglas called the China Syndrome. The movie was called so, because a nuclear meltdown would melt all the way through earth to China.

It seem very appropriate to call the current financial market meltdown a "China Syndrome" in more than one way....

If a system works, it wouldnt need a "bail out" to begin with...not one this big at least!

Zain

call me the prophet of doom but this recession has not even got going yet. although we have seen what appear to be some spectacular events, the real crunch is yet to come. the loans put forward by the various governments are mere short term measures with no account of the devastating future effects on the economies. A depression is heading toward us and although governements can been seen to be trying to free up the commercial and banking credit markets, there are no proposals on any table that help the people in society who are struggling with their mortgages, debts and credit cards. It's all very well writing off billions in bank liabilities. the banks are institutions. What about measures to write off debts for people who are now facing doom because what is clearly been economic frivolity by the UK government. A change of leadership and party politics in London and Washington will do more for the economies than another $700 Billion. At leastthe Americans can look forward to a very prompt end to the distater of the Bush years, but in Britain we still have to suffer this hopeless stangnant and paralytic Labour Government for another 2 years. As usual, Britain will end up worse off....

3 step solution to economic crisis
CNN correspondent is corrent that crisis will only end when American housing market start to correct itself.

1) revalue homes at current value and extend a home loan at 100 % interest on the new loan – (not the 300 plus percent banks lend it at) and let the banks wear the loss as they have already made their profits.

2) stick with the current plan of lending business short term 2 month loans at reasonable interest rates

3) legislate against banks giving riduclous ( and greedy ) loans on futures ( as if they werent aware their was a bubble )

Just maybe ?

I think the media is putting out most of the distrust in the banks. They are emphasizing too much "What if", What about" and adding too many hypothetical questions. The money is there in the banks. People are not sure about being able to keep their jobs. Biggest point. No job, no spending. Once the companies reaffirm their employees their jobs are safe, the spending will increase.

Every economy in the world is entangled. To go off and blame one country is wrong. All economies in the world are intertwinned. These were all business decessions and not government decessions. The governments are now just trying to controll the mess and clean it up.

No it doesn't solve a thing, but it does wonders to re-enforce the notion that if it's white collar crime on Wall Street, Washington will be there to pick you up and dust you off.
The problem is credibility!!! It's not an image problem or a perception problem, it's the real raw New Deal, no money, Big Problem problem. If Wall Street businesses continue to operate with their thumb on the scales, US and world investors will not return in mass( Wall Street Can't be Trusted ). The recent AIG party just fans the flame. A quick restoration of confidence would be to quickly start jailing as many of these arogant bastards, as you can catch. It will be tough though. Like trying to catch rats escaping into the sewer.
Wall Street should be described as, A House of Thieves. The CEOs should be held responsible and not walk away with a penny, because it was with their blessings that the underlings got busy. No one will ever convince me that they didn't know what was going on. Wise Guys count money better than anyone. Look at the pay packages. Who needs that much money to live on? Figures don't lie, but liars can figure. They knew what was going on.
This problem is world-wide now and growing, with the problems origin in the US. People are wanting and expecting justice. Until justice prevails, the hits will just keep on coming. I don't expect much from our government, but I would like to believe that in a country that prides itself on up holding the rule of law that the government would break from its long held tradition of just throwing money at a problem and enforce applicable laws to the maximum. Until then we may as well stick our heads between our legs and kiss our money good-bye.

My view is that to get out of this economical mess is to have more aggressive rate cuts from federal banks ( maybe even down to 0 or 0,25%) and have them there for maybe 3-6 months. It would bring more confidence in the banking sector , provide adequate liquidity to them and also bring consumers and small businesses come forward to borrow more money and start spending. Inflation should not be a worry right now in most of the countries due to the slowdown caused by this turmoil. For economy to come back on track consumers have to be able to borrow more money with very less interest rates and businesses need to be provided money on low interest rates to keep them running. And for this banks need to provided with more and more liquidity ( also on low interest rates). As soon as banks are able to borrow from fed for lower interests and provide more liquidity in the market people will have more confidence in the banking sector. It could take maybe 1 year to do all of this but atleast there will be less bloodbath on the wall street. Thanks and looking for some criticization of my comments.

The financial crisis will be a long journey to recovery. The fundamentals are completely in disaray. The costs of production and the lending rate are the relevant factors. These elements are all at a very high costs. Do not forget, America has boxed herself into a very tight corner, as a result of mismanagement and maladminisration of the past eight years. America will pick up the bill for needless wars. The recession is the currency of ineptitude and reckless leadership.
Best regards.

This "bailout" is fast- becoming something of a fiasco.

Now we see it does NOT solve underlying problem.

What purpose is it serving then ?

Sounds like jobs and money for the boyos...

The chairman of the fed seems a little overmatched by this problem or worse he is pandering to some badly run companies...

In a general way , the US stock mkt indices became a unhooked (unhinged) in the early 1990's. Noone (NOONE) can yet explain how the Dow rose by 1500 pct from a meager 777 on August 12, 1982, to 11,722.98 by January 14, 2000.

1500 % ....! Nice profits...Historical profits ! Unreal Profits!

We recall that :

- In 1966 the Dow was at 1000 pts.

- In 1982 the Dow was 777 pts.

So what does this mean ? the mkts give and they take back...

If the historical record from 1920-1982 is any guide, a "normal" DOW is probably about 7000 after accounting for inflation and even assuming some bonus from globalization , rational leveraging, new instruments etc.........

It would appear that the party is over & the bear mkt has just begun.

If I only had the strength to contribute meaningfully to this debate, or to at least contribute from a standpoint not biased by personal developments. Unfortunately, my employer recently decided to terminate my employment. I cannot get my spouse's green card renewed (you need an income for that). I cannot even stay in Japan (my vise is dependant on having an employer). I also cannot return to the US (you need an income to secure even a modest apartment).
Now I know what many of you may be thinking. Why is this person not seeking employment? Believe me, I am with energy and a sense of immediancy that comes from the knowledge that I may soon be an illegal alien in a foreign land, or that I will be homeless.
Much like many of you have stated, I also hold resentment towards those lenders who created the so-called sub-prime instruments, or at least who employed these vehicles indiscriminately in an attempt to increase revenues even at the cost of the innocent (or in some cases, not so innocent). This resentment is not lost on those investment firms who bought these bundled investments. But I also understand the implications for innaction. Companies who need short term funds to cover inventories, materials, equipment maintenance, or even to pay salaries, may soon, if not already be unable to borrow. this means closures, bankruptices and substantial loss of jobs.
I will not go into the reasons my employer decided to terminate me. Lets just say that most of my former co-workers, from frontline to senior executives disagree with the company's decision. But as with many companies, especially Japanese, best not rock the boat less your image be tarnished affecting your own future promotion potential.
So, here I sit watching the days tick by, frantically working with executive recruiting firms, sending out highly tuned resumes, and everyuthing else possible from an overseas location. Oh, and did I add that my spouse was diagnosed with Stage 3 cancer last year and has had 2 surgeries to date and is now on chemo? Or that I have a son?
Yes, this financial crisis may very well be the reason my family is forced to break up (she cant get a green card because of my lack of income, I cannot keep the visa without same), my spouse's inability to continue on her necessary chemo (god forbid I should lose her), I either become an illegal alien in Japan or return to the US homeless (no family or friends with the capacity to have me stay with them).
So, for those who may say that perhaps I am simply not marketable. I hold a BBA in Finance with honors, an MA in International Relations also with honors, and a JD with honors. My employment accomplishments are, if I dare say, spoken of to this day as "brilliant" from both inside executives and outside entities.
In closing, I truly hope this economic mayhem is short lived, for all of our sakes.

I wonder what the effects would be if the US government started backing very reduced rate mortgages. Something like a fixed 3% or maybe adjusted to match inflation? Not the previously supported "liar loans" but solid loans with people putting down 20%+ and good credit histories. Would people be tempted to start purchasing homes again and doing renovations? I would suspect it would probably be better than the government owning lots of buildings.

In East Europa effect of american crises will no have efects?

Todd, since this financial crisis broke in the news several days ago I have been following reports on CNNI almost daily here in Europe. Although CNNI's financial team coverage has been good there is one person missing-in-action: you! Where have you been and why are you not on the air at CNNI reporting about this crisis? No wonder there is a lack of confidence in global financial markets, CNNI's top financial point man is missing. Come back and tell us that everything is gonna be O.K.___ or not.

The new bailout that was passed is just another example of the government's penchant of throwing money at a problem while hoping that it will go away. The bailout is only a temporary patch when we need a permenant solution. Unfortunately, I don't believe that a solution can occur until a new president takes office. The question we will then ask after saying that is simply will the required change take place?

The bailout frustrates me!! We are suppose to be in a free market society.....no government involvement. I would like to have seen the collapse of companies and the CEO's not exiting with millions of dollars. Compensation plans need to be scrutinized and solvency of a company should lay the blame on who is responsible. What has America done to itself?

I firmly believe at the rate at things goes the recoverly is now getting in sight i priedicted that the current crisis will end in March 2009. A lot of people might have neglected that current crisis is due to the fall in the asset value not due to the financial health of the banks.

To me every crisis is the work of the greed and its the greed of the poor that creates all crisis and every crisis serve to hurt the poor and benefit the rich. The reason is simple if we look at around just when so many ignorant investor dumping their shares, the rich are accumulating the shares and assets in others words they are legally robbing your assets and i dun understand why.

Stay invested for i now that once the crisis is over the boom time is not far and its going to be a real boom for at least 3 years if you just follow the pattern of every recession.

I feel that bail out bills are rediculous.. If as a citizen i break the law i risk the judgment of the people or the court system. How does AIG and other large banking /investing corperations taking our/american people's own money and poorly investing it then not without splurging 400 plus thousand at a spar retreat.. rely on our submissive behavior to be abused by a corperate tyrant affilated with a current government which has proved time and time again its failures and comedic coverups in lue of the fact they are responsible and should be held accountable as the american people are desperatly deserving of.

Of course the bail-out will not fix the economy. Look at what is happening since it passed. Markets are still falling and the people on wallstreet are still in a panic.

Free market? That's gone now. It has now become a government take over of our financial system. By passing this bill, they have finished selling out the people. They are delaying the inevitable. It will crash. The american people will suffer because the greed of our elected officials and their schemes to get richer.

This whole mess will not clear up for years to come. My grandchildren will still be feeling the effects of this government's failure to maintain a free market system, and I'm only 28. Watch what happens to us next. The government will start moving towards a full take over of the market to "save" us from economic disaster. I will laugh my way through their lying faces.

I agree that the bail out package is far from what the U.S needs to fix its financial crisis. This crisis is much deeper than expected, and eventually its going to hurt the classic American citizen living on credit. Let’s face the real facts: Most Americans live their day to day on their credit cards, acting and living "as if". Spending thousands a month and making minimum payments on their credit. SO what will happen to these people when banks cut available credit and Americans are left with nothing but debt? On the other hand Markets continue to plunge and losses continue to rise day by day making the bail out plan look as a joke what is 700 Billion to trillions lost?.
On the other hand I believe what is making this crisis worst is the economic panic that people are facing. Financial ignorance does not help, international investors are cashing their investments, assuming losses but playing safe. To me, NOW is not the time to act, stay put, if you don’t need the money right away!!! It will take time but the U.S will rise!!!
In terms of forex, we will eventually see a depreciation on the USD, EUR, JPY and other currencies where governments will eventually "print" or "inject" cash to come out of todays hole. what do you think?

What does it take to bring our government back to "of the people, by the people, and for the people"? I wrote to every one of our representatives (Ohio) and I have to believe that so did others. Most voted for it despite my cries of "NO".

This is frustrating to the point of infuriating. I agree with others who have stated that this is the poor middle class giving to the wealthy upper class through our government. "Through our government"? There is something substantially wrong with this picture?? Who picks up the pieces of my family's life? Now we (the middle class) have MORE debt without any control over the process of the system. Meanwhile the company employing my husband continues to ship jobs overseas at a rapid pace. We think we are safe for about one more year. After that, I have no idea what will become of us. Do you think George Bush or Dick Chaney care?

I would like to hear some ideas about how we may unite to make our voices heard loudly and clearly.

Be blessed and may the angels protect you,
Andrea (in Toledo)

Today, I was made aware of a situation with AIG. They recently received the second stage of money for their bail out. I have yet to find out the total $$ of our money that they were handed and the management allocated $400,000.00 of their gift to a huge celebritory party. Where are the sanctions that we have heard so much about.

Today Whoopie Goldberg verbalized her idea of how this could have looked to infuse more fluidity of $$ into the economy. I am quoting, "Our government should demand that the banks forgive 50% of every homeowners' mortgage as a one time deal". This would relieve the overstrapped middle class American family and allow us to believe that the debt incurred by our government is worthwhile.

I am of the Kent State generation and although I am supposed to be too mature to mobilize demonstrations, I am THERE. This agony just goes on and on. How do we let our representatives know that we are against this feeble attempt to infuse the big boys with more money with which to play and make certain our words are heard??

Even Barack voted for the measure as did McCain. I thought their efforts were focused upon helping the middle class families. Have I missed something? What clause, paragraph, or page speak to relieving the moddle class of the heavy burdens we carry due to the idiots in the White House and the VP quarters??

I keep telling my husband that when living in England became toxic, the pioneers came to America. Now where do we go?? Australia??

Wake up and smell the coffee. It's going down!!!!!! Get out of it!!!!!!

The U.S. government needs to act quickly now as the lender of last resort. Either a special purpose vehicle is used or it acts through a nationalized finance institution; in each instance, the U.S. government will do what main street and wall street will not do, which is to lend to every indvidual, small business or large corporate.

This idea to use sheer, brute force to unthaw illiquidity in the money markets runs counter to the free market thinking. But no institution is functioning under normal conditions. The complete opposite is true: most, if not all, financial institutions and even whole economies are paralysed by irrational fear and distrust.

By acting as the default lender, the U.S. government will not only effect immediate liquidity, such discernible activity may well coax the financial institutions to return to the market, sooner than later.

Kind regards,

Julian Andrew Wong, Singapore

Sheer lack of intelligence and freemarket greed got the whole world into this mess which is here to stay. Hard-earned wealth of millions the world over have been destroyed by the high-paid few . The best we can do is rename wall Street as Fall Street.

They needed a fall guy. No fall guy, no confidence.This crisis needed a Kerviel.Once you blame some roque trader or banker, hope he runs, have a manhunt from new york to dubai, put out some interpol warrants, and finally catch him, boom you got him, confidence bounces right back.That is how it was done in the past.

Now no one is to blame, so no one can be trusted.
Problem is they are all to blame, but somebody should take responsibility.It is too late now, but Bush should have taken responsibility for this thing.His record won't get any worse.

I have a feeling they don't know what really caused this thing ,thus can't fix it and prevent it from happening again.That is why there is no confidence.Some rules in banking and trade must be changed.But throwing money at the problem in a market where it is business as usual is like a fighting a California wild fire with a gardenhose.

Shut down the market take for a week. Don't worry the oil will still be there.Stop the speculating.
Don't tell me there was sell of on the market and we lost again, because I will ask you who bought what you sold and why did they buy the crap you sold?

As Nancy Pelosi suggest a second financial suport plan of +/- $1 trillion USD is not out of the question, we need to stand behind our American investors, banks and finacial institutions if we (Americans) are to continue being the number one economic global leader, timing is everything during this financial crises.

Richard Kennedy
Kalispell, MT