>Now I Have a Stress Headache

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>Someone finally explained just what the bailout will entail. Instead of making me feel better, it just got me riled up. This passage stuck out in particular:

The initial addition to the federal debt would be $700 billion, although the Congressional Budget Office believes the net budget loss will be “substantially smaller” because the government can recoup some of its losses and perhaps sell the securities for a profit later. There are also administrative costs, which the CBO currently estimates at perhaps “a few billion dollars per year.”

Correct me if I’m wrong about this. The government wants to set aside money to buy (or insure) troubled assets from firms that can’t sell. How in the hell is the government supposed to recoup any money at all if no one wants to buy those assets in the first place? How do they suddenly become desirable to the market? What are these possible factors?

About Amy Ruiz Fritz

Wine drinker, LEGO minifigure enjoyer, movie watcher, furniture re-arranger, Nook reader, traveler, online shopper, aphorism collector, cheese lover, humor blogger?

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