In my previous post I mentioned that the U.S. House of Representatives passed the $700bn bail-out plan, but I forgot to also mention that on the same day President Bush signed the new bill – dubbed “The Financial Stability Act of 2008” – into law. So it is now officially the law of the land and the U.S. Treasury can begin the exciting work of using your tax payer money to buy junk mortgage assets. I’m so jealous! I too want my tax dollars to go towards buying junk assets! Now what remains to be seen is whether this radical government intervention in the financial sector will have an effect or not. Will it really “stabilize” the economy? It remains to be seen, but even for the short term it will take several months before we can even notice if the bailout plan is working.
Press release follows below:
By JULIE HIRSCHFELD DAVIS, Associated Press Writer 2 hours, 7 minutes ago
WASHINGTON – With the economy on the brink of meltdown and elections looming, a reluctant Congress abruptly reversed course and approved a historic $700 billion government bailout of the battered financial industry on Friday. President Bush swiftly signed it.
The president says he believes in a free-market system and that the government should intervene “only when necessary.”
He says he thought it represented “decisive action” by Washington to ease the widening credit crunch across the country.
He believes in a “free-market” system only when it is expedient! That’s what he should’ve said!