The men who run America’s economy have urged a key congressional committee to act quickly and bring in a 477 billion euro rescue plan for the country’s banking system.
It’s asking a lot of the US taxpayer, but Treasury Secretary Henry Paulson says the alternative is worse:
“I believe if the credit markets are not functioning, that jobs will be lost, the unemployment rate will rise, more houses will be foreclosed upon, the GDP will contract, that the economy will just not be able to recover in a normal healthy way, no matter what other policies are taken”.
The Treasury wants unlimited authority to buy back the bad debt clogging the financial markets.
But Senator Christopher Dodd said there will be no blank cheque:“The secretary and the administration need to know: what they have sent us is not acceptable. This is not going to work, and they have to come back and work with us”
News of the proposed bail-out gave stocks a big lift at the end of last week.
However, major indexes have fallen sharply again this week after renewed concerns over the plan – the DOW Jones was down 160 points at close of trading yesterday.