I vacillate between thinking it would be a good thing to let the US banking system work its own way out of the crisis, and then supporting a federal bail-out.

On the one hand, the banks ought to bear the costs for their own bad decisions, but on the other, if that means that viable banking businesses are destroyed through the fall-out, that would seem to be worse.

Central banks know how to create liquidity, and this doesn't appear to be a central banking crisis. It appears to be a crisis of trust between private banks. The wholesale market has frozen, to the extent where some of the smaller banks in Australia are apparently unable to settle deals.

But what difference will the trillion dollars make to this? Or the $4 billion that the Australian government is putting into the mortgage market in Australia?

On balance I'm in favour of government action, but I can understand why there is so much electoral pressure against it in the US.

Graham

The problem is that Congress was voting to give a third party absolute control over $700 million of public money, and borrowed money at that. Is this what they are elected for? To give away the money and the right to say how it is spent? What if it isn't spent fairly or wisely? What if it isn't enough?

"The buck stops here." will never be hackneyed. It is what is expected of our politicians in a crisis.

Fester,it is $700,000 million or roughly 65% of our GDP.I would like to get things in perspective.I've been unable to find on the net, not the GDP of the USA but it's net total worth as a nation.It has a GDP of approx $14 trillion as their pop is 15 times ours,their net national worth must be at least 40 times this.Given this perspective,their national debt of even $20 trillion[worst case scenario] as suggested by La Rouche,is relatively small by comparision.

So does anyone know or have have reference to,our net national worth and that of the US.This will put things in perspective in regards to our collective debt?ie this will include the value of all land,goods,services minus debt.

I think Congress did the right thing in voting down the bailout bill.

It was badly flawed. As pointed out by Fester, there was little in the way of accountability as to how the money would be spent. There were no penalties for executive fraud and nothing requiring a rewriting of the offending mortgages.

Hopefully, the Democrats can come up with a better proposal - one that will help bail out Mr and Mrs Average in danger of losing their home and superannuation and not the Wall Street high flyer.

Here's a link to an interesting site which tracks campaign donations and voting records in the US. http://www.maplight.org/map/us/bill/72675/default. There appears to be a glitch and the page refers to two different bills, but I think it is about the bail-out and not tax breaks for service people.

They claim that the average contribution from finance related companies to those supporting the bill is $144,988,and to those opposing it $90,213.

Not sure what this really says. Do you get what you pay for and would the bill have gotten through if those opposing it owed more to the securities industry? Or is it that those taking less are less inclined towards the industry, or maybe less knowledgeable about it, so less attractive to industry donations?

Unfortunately if they sink Graham so do we.
We very well may in any case.
Like you I am not impressed with the whole thing, but think acting is the best thing.
I have some out comes I think we should ask for in return.
Future profits to re pay with interest the American tax payers.
Prison for those whose criminal actions bought this about.
And tighter control to see it can not happen again.
We are far from out of trouble, this has the potential to hurt us much more than most think.