2008 Woodie Awards
Bailout bill to sustain economy
Possible effects on student loans
ERICA ONDA
Issue date: 10/15/08 Section: News
Congress passed a $700 billion bill designed to aid the ailing banks of Wall Street Oct. 2 in an attempt to help the U.S. recover from recent financial damage. The bill was first rejected by the House of Representatives Sept. 29 by a 228-205 vote. Students and education finance may be effected.
The Dow's falling 778 points the Monday after it failed was a strongly encouraging factor for the bill's passing the following week, along with added provisions, including $150 billion in new tax breaks. In addition, steps were added to the bill to limit home foreclosures and put restrictions on compensation to company executives. Despite the reassurance of the bill's passing, however, the Dow fell 125 points the next day, Oct. 3.
Originally titled the "Troubled Assets Relief Program" and the "Relief Plan" but quickly dubbed the "Bailout Bill" by the media in reference to its bailing out Wall Street, the $700 billion bill is designed to buy up the bad assets of banks in trouble, wait for the market to become more stable, and then resell them, according to Time Magazine. By taking the debt weight off of the shoulders of companies on the brink, the plan's creators, including the U.S. Treasury secretary Henry Paulson, Chairman of the Federal Reserve Ben Bernanke and President of the Federal Reserve Bank of New York Timothy Geithner, are hoping that the money injected into the companies can stabilize the markets and help avoid a potential economic crisis. The $700 billion will be released in installments, beginning with $350 billion, according to The New York Times.
Many Americans are angry about the bailout because they feel that the government should not give such a huge amount of taxpayer funds to banks that, in their financial misjudgment relating to bad real estate investments, found themselves in this mess in the first place. For others, it's worrisome and unconstitutional for the government to interfere to such a high degree in the free market.
However, according to Paulson, "They're angry and I'm angry too. But the average American doesn't understand the implications it has for them," he said, meaning that despite the banks' starting of the economic wildfire, the bailout is necessary in order to avoid an economic crisis that could trickle down and affect everyone.
The Dow's falling 778 points the Monday after it failed was a strongly encouraging factor for the bill's passing the following week, along with added provisions, including $150 billion in new tax breaks. In addition, steps were added to the bill to limit home foreclosures and put restrictions on compensation to company executives. Despite the reassurance of the bill's passing, however, the Dow fell 125 points the next day, Oct. 3.
Originally titled the "Troubled Assets Relief Program" and the "Relief Plan" but quickly dubbed the "Bailout Bill" by the media in reference to its bailing out Wall Street, the $700 billion bill is designed to buy up the bad assets of banks in trouble, wait for the market to become more stable, and then resell them, according to Time Magazine. By taking the debt weight off of the shoulders of companies on the brink, the plan's creators, including the U.S. Treasury secretary Henry Paulson, Chairman of the Federal Reserve Ben Bernanke and President of the Federal Reserve Bank of New York Timothy Geithner, are hoping that the money injected into the companies can stabilize the markets and help avoid a potential economic crisis. The $700 billion will be released in installments, beginning with $350 billion, according to The New York Times.
Many Americans are angry about the bailout because they feel that the government should not give such a huge amount of taxpayer funds to banks that, in their financial misjudgment relating to bad real estate investments, found themselves in this mess in the first place. For others, it's worrisome and unconstitutional for the government to interfere to such a high degree in the free market.
However, according to Paulson, "They're angry and I'm angry too. But the average American doesn't understand the implications it has for them," he said, meaning that despite the banks' starting of the economic wildfire, the bailout is necessary in order to avoid an economic crisis that could trickle down and affect everyone.
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