Rescuing US economy

Although there is widespread scepticism about the package's ability to turn the corner and the criticism that it is aimed at helping rich financial speculators who were responsible for the crisis, there is an equally widespread feeling that this largest government economic intervention since the Great Depression of the 1930s is a "necessary evil". President Bush acknowledged, "our economy continues to face serious challenges", just as he signed the bill into law. The Treasury is speeding up efforts to develop a plan for spending the huge money. It has the power 'to buy bad debt from banks, credit unions, thrifts and insurance companies. The hope is that by shoring up their books, trust will be restored to the financial system, banks will begin lending again, and it will start the economy on the road to recovery.'

However, with the war on terror continuing to make holes in the economy one wonders whether the inbuilt mechanism in the American system would come into full play with the injection of $700 billion. Should it fail to work, not only the US and Europe but also the rest of the world would have to suffer worsening economy, with greater fallout on poorer countries.