{"id":516,"date":"2008-09-30T10:26:50","date_gmt":"2008-09-30T10:26:50","guid":{"rendered":"http:\/\/astraea.net\/blog\/?p=516"},"modified":"2008-09-30T10:29:34","modified_gmt":"2008-09-30T10:29:34","slug":"how-the-bail-out-affects-you","status":"publish","type":"post","link":"https:\/\/www.astraea.net\/blog\/how-the-bail-out-affects-you\/","title":{"rendered":"How the bail-out affects you."},"content":{"rendered":"

Here’s an extract from a Q&A<\/a> on the BBC website about the proposed, but rejected, bail-out plan<\/a>. You will see why it was not popular:<\/p>\n

How would the bail-out have affected me?<\/strong><\/p>\n

If you live in the United States, another $2,300 would have been added to your share of the national debt.<\/p>\n

The bail-outs were expected to add up to a whopping $1.8 trillion. That’s $15,000 per US household.<\/p>\n

Without a bail-out, the economic crisis is likely to deepen.<\/p>\n

In a worst-case scenario there could be a domino effect of banks failing around the world.<\/p>\n

Not only would that overwhelm any systems protecting savers and investors, it could have triggered a global economic crisis, with millions of companies going out of business and tens of millions of jobs lost.<\/p>\n

If some sort of solution can be reached, the worst of the crisis could be avoided, although it is unlikely to bring everything back to normal.<\/p>\n

How was the US government planning to finance the purchase?<\/strong><\/p>\n

The US government had intended to borrow the money from world financial markets. The proposed legislation gave the Treasury the authority to issue an additional $700bn worth of Treasury securities.<\/p>\n

The hope was that eventually the Treasury could sell the distressed assets back into financial markets once the housing market stabilised, perhaps making a profit on the sale.<\/p>\n

Others were concerned that issuing more government debt, and virtually doubling the size of the budget deficit, could be inflationary.<\/p>\n

The sale could have made the US more dependent on foreign banks, who may be the biggest purchasers of Treasury securities.<\/p><\/blockquote>\n

Also, worth a browse, especially if you are a US depositor or investor is the New York Times’ \u2018Is My Money Safe?\u2019 and Other Questions to Ask<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Here’s an extract from a Q&A on the BBC website about the proposed, but rejected, bail-out plan. You will see why it was not popular: How would the bail-out have affected me? If you live in the United States, another $2,300 would have been added to your share of the national debt. The bail-outs were …
Continue reading How the bail-out affects you.<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[5],"tags":[],"class_list":["post-516","post","type-post","status-publish","format-standard","hentry","category-worldofmoney"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p4hwcd-8k","jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.astraea.net\/blog\/wp-json\/wp\/v2\/posts\/516","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.astraea.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.astraea.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.astraea.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.astraea.net\/blog\/wp-json\/wp\/v2\/comments?post=516"}],"version-history":[{"count":0,"href":"https:\/\/www.astraea.net\/blog\/wp-json\/wp\/v2\/posts\/516\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.astraea.net\/blog\/wp-json\/wp\/v2\/media?parent=516"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.astraea.net\/blog\/wp-json\/wp\/v2\/categories?post=516"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.astraea.net\/blog\/wp-json\/wp\/v2\/tags?post=516"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}