Treasury Delays Bank Bailout

In the article “Treasury delays bank bailout announcement” http://www.reuters.com/article/newsOne/idUSTRE5160AM20090209, it is stated that the reason the Treasury has to delay the President’s bank bailout plan is because of the debate in the Senate about the “Stimulus Plan.” Both sides say they believe they have the best path to go down. In the past years, tax cuts have been implemented to stimulate the economy, and the economy continued to tumble. Those who support this are the ones who lost in the last election, and who, in my opinion, are resentful of losing. They are the ones who said the economy was strong, as tens of thousands of Americans lost their jobs and their homes. History has shown that tax cuts do not stimulate the economy. The banks need to lend money on “good” loans. There are those who think the banks should take the hit for what has happened. The problem is that if they take too big a hit, everyone suffers. It is true the new tools that the current administration is proposing have not been tried before, but we need something new to get us out of our current situation. Every day delayed is a day that we go further into the recession.

Input from the U.S. Senate Stimulus

In the article “Stimulus: Senate’s housing hopes”, http://money.cnn.com/2009/02/01/news/economy/Senate_stimulus_housing/index.htm?postversion=2009020117, the author talks about some of the ideas the Senate and the President have presented to turn the economy around. They believe as most people do that the Real Estate Market in the USA has to recover for the overall economy to recover. One thing that links all of the plans mentioned in this article is for Troubled Asset Relief Program, (TARP), monies to be given to mainstream America and not the banks or Wall Street.

Recent history has shown that when the troubled banks have been given money to get themselves out of their current situation, instead of investing in mainstream America, they purchase other companies to expand their current businesses. Instead of having a stabilizing effect things got worse and they asked for more government money to get them out of their new situation.

We are in an economical crisis that is unique in history. Until these programs like the ones that are mentioned in this article are implemented it will not be known if they will work. We have attempted to help the financial institutions that had historical profits over the past years, profits that in the end were illusions and that the world is paying for now. We need to attack this issue from a different direction, one that will help the people who are paying for the profits that never were.