Reply #55: Title of the linked article? Bailout won't put the brakes on downward slide

[That Guy 888]

Quote:

The intense political wrangling over the Bush administration's rescue plan for holders of bad mortgages has obscured the fundamental issue: A program to take bad loans off the books of lenders and investors, however necessary, won't quickly bail out an economy that appears to be headed downhill.

...But, at best, all a government program can do is keep things from getting dramatically worse, economists say. In the worst case, a government bailout program won't keep financial conditions for households and businesses from deteriorating much further.

...Indeed, it's possible a bailout package could get a euphoric reception from both the stock and credit markets. But any psychological effect would be temporary, experts caution. In the medium and long term, it's by no means certain a bailout will succeed.

"I'd give the government a 50 percent chance of stabilizing the markets," Edlin said. "The reason for optimism is that there will be an enormous amount of money. The reason for pessimism is that nobody knows how the money will be spent."

- end quote




The article says something should be done. It seems caution, planning, and reason would be of more help than fear-mongering.