Can Their $700B Rescue Plan Do the Trick?

Experts say action is needed, but doubt if it will be enough
By Wesley Oliver,  Newser Staff
Posted Sep 21, 2008 1:49 PM CDT
Can Their $700B Rescue Plan Do the Trick?
Officials in Washington are devising a plan to buy hundreds of billions of dollars' worth of bad mortgages in a bid to save the struggling American economy.   (AP Photo/Pablo Martinez Monsivais)

(Newser) – Forget white and blue: Uncle Sam is all red these days after swallowing hundreds of billions in bad mortgages and coughing up billions more to save strapped businesses. As the Feds strategize a solution to the mess, experts are unsure if the plan will work and how much it’ll cost taxpayers, Peter Goodman notes in the New York Times, though there "is wide agreement that a broad intervention is necessary."

“We’re deep into Alice in Wonderland’s rabbit hole,” said a Princeton economist. The Treasury’s intention to spend as much as $700 billion on the tainted mortgages, and then sell what it can, “ameliorates” the crisis “very substantially,” the economist added. But another said, “It’s not enough,” conceding, though, “it’s the first time they have done something that makes a difference.”
(Read more subprime crisis stories.)

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