Plan Questioned

In response to the economic crisis in the United States of America, the Emergency Economic Stabilization Act of 2008 was introduced. The details of the plan is as follows: “the government could get $250 billion immediately, $100 billion more if President George W. Bush certified it was necessary, and the last $350 billion with a separate certification and subject to a congressional resolution of disapproval” (manilatimes.net).

The problem all started when the American banking industry became “clogged up” with bad assets (timesonline.co.uk). After the first few casualties, namely Bear Stearns, Merrill Lynch, and Lehman Brothers, the problem starts to spread outside the banking industry, affecting most American households and even stock markets worldwide. The plan is to buy these assets and hope the market recovers.

The plan drew several negative criticisms; one even came from Japanese Prime Minister Taro Aso. The problem they say is that it may not be enough. Earlier this week, the American market was able to rebound, but was not able to sustain that rise. In fact, things started to get worse and if things continue this way a global recession seems inevitable (cnn.com).

Europe is also in talks on how to keep their countries secure from this global crisis through their own bailout plan, with the same method as the United States.’ However, representatives are divided on the details, with Germany opposing a common European rescue fund (presstv.ir). However, every nation agrees on buying from banks to restore confidence in the markets. Germany has already put out a fund to save German banks, which the Irish and Greeks have already started (narbosa.com).

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4821160.ece

http://news.bbc.co.uk/2/hi/business/7631321.stm

http://edition.cnn.com/2008/BUSINESS/10/16/world.markets/index.html

http://www.manilatimes.net/national/2008/sep/30/yehey/top_stories/20080930top1.html

http://www.narbosa.com/2008/10/eu-bailout-plains-in-ruins-as-germany.html

http://www.nowpublic.com/world/eu-leaders-thrash-out-2-7-trillion-bailout-plan

http://www.presstv.ir/detail.aspx?id=71531§ionid=3510213