Is Multi Billion Dollar Bailout Plan On A Rocky Road To Nowhere?
With the Bush Administration’s $700 billion financial sector bailout plan dominating news headlines, and authorities seemingly unable to reach an agreement, the stock markets continue to be tossed about on a turbulent sea of uncertainties. Thursday saw a slight market rally, with investors cautiously optimistic that the bailout plan would be approved on Thursday, and put into action in the very near future. Indeed, at one stage on Thursday it did appear that an agreement had been reached, but then, once again, the wheels fell off, squashing any hope of an early resolution.
Barack Obama and John McCain joined in the talks on Thursday, ostensibly to rise above their differences and to work together on a plan of action that would benefit the U.S. economy, and ultimately American citizens. However, neither Presidential candidate was able to unite the parties to bring a deal any closer to a conclusion, with lawmakers wrangling over competing counter-proposals in a meeting which stretched late into Thursday evening. The gathering which was meant to fast-track approval of a plan ended up making it painfully clear that deep divisions between Democrats and House Republicans were only going to slow the whole process down, or even derail it completely.
On Thursday, just prior to the start of the meeting, President Bush told reporters that the U.S. is in a “serious economic crisis”, expressing his hope that an agreement would be reached “very shortly”. It has been widely accepted that the original plan is flawed, a fact that even Treasury Secretary Henry Paulson conceded to, and both parties have legitimate concerns regarding the plan that need to be addressed. However, following hours of arguments and counterarguments, it was eventually decided that it was time to call it a day. Talks will reconvene on Friday and should an agreement still not be reached, it is very likely that discussions will continue through the weekend.
In the midst of all the dissension, Mr. Bush’s deputy press secretary, Tony Fratto, officially confirmed that the President “supports the core of Secretary Paulson’s plan.” While the majority of the powers-that-be seem convinced that a bailout of some sort must happen – and no doubt will once the kinks have been ironed out – the American public is divided on the issue, with the majority being against it – See Wednesday’s article: $700 Billion Plan – More Questions Than Answers. In the meantime, tensions at stock exchanges continue mounting, investors remain on tenterhooks and the “serious economic crisis” that the U.S. is experiencing is spilling over into the global economy – while becoming increasingly serious as the minutes tick by.