User:Ronnotel/Summary

Various bodies in the U.S. government are weighing a plan to bailout the U.S. financial system. This measure, which involves the government acquiring or insuring a variety of troubled mortgage-backed securities, is intended to reduce the level of uncertainty regarding these assets and restore confidence in the credit markets.

Following the a wave of emergency liquidations among Wall St. investment banks such as Lehman Brothers, AIG and Merrill Lynch beginning in mid-September 2008 &mdash;events considered part of the on-going financial crisis of 2007–2008&mdash;the United States Secretary of the Treasury Henry Paulson proposed a plan under which the U.S. Treasury would acquire up to $700 billion worth of illiquid securities that are backed by troubled housing loans. The plan was immediately backed by President Bush and negotiations began with leaders in the U.S. Congress to draft appropriate legislation. Proponents of the plan argue that the urgent, dramatic intervention called for by the plan is vital to prevent further erosion of confidence in the U.S. credit markets and that failure to act could lead to a significant downturn in the economy. Opponents object to the massive cost of the plan and point to polls that show little support among the public for bailing out Wall St.investment banks.