Officials of the U.S. Treasury announced a new plan Monday that is
supposed to buy up troubled assets that are hurting banks and choking
the flow of loan money needed to get the economy moving again.
The plan calls for up to $100 billion of previously allocated
government money to be used in conjunction with private investments to
get bad assets off the books of banks.
The "Public Private Investment Program" combines taxpayer money with
private funds to initially buy $500 billion worth of bad assets from
Officials say they hope banks will begin lending again if they are freed of their toxic assets.
The financial system fell into chaos last year after hundreds of
thousands of Americans failed to pay their home loans, squeezing the
funds available for banks to lend to other consumers.
The housing crisis that spread throughout the entire U.S. economy helped trigger a global recession.
U.S. President Barack Obama says he sees some hope that the housing
market is improving, and that the U.S. economy may be starting to
recover from the recession.
In a television interview broadcast Sunday (on the CBS program "60 Minutes"),
the president says increasing numbers of homeowners are taking
advantage of low interest rates and refinancing their home loans.
He also acknowledges that people are angry that taxpayer money intended
to rescue ailing banks instead was used to pay large bonuses to the
executives of insurance company AIG.
But Mr. Obama questions the legality of a bill Congress passed last week that would impose a 90-percent tax on the bonuses.