What does the federal bailout do?

Answer 1

Called The Emergency Economic Stabilization Act of 2008 (or more colloquially the "Bailout Bill"), it provided the Treasury Department with $700B help the United States financial system by purchasing troubled assets (the major part of the bailout is called TARP, the Troubled Asset Relief Program) and providing loans for struggling companies. The links below will provide a summary and the full text of the bill.

It increases the national debt. If the benefits go to the wealthy it will further destabilize the economy. The root cause of the economic crisis in the U.S. is an artificial redistribution of wealth and a concentration of wealth among a small percentage of the population. Middle and Lower class people where seduced into believing they could afford a home, mortgage brokers pulled the rug out from under them and we are still reeling from the shock. Congressman Kucinich has referred to the 700 billion bill as "Racketeering on a scale this country has never seen before". That is the best description of the "700 billion USD plan" I have seen to date. See link below. Much of it is still evolving. Suggest you review wikipedia under bailout plan. See: http://en.wikipedia.org/wiki/Bailout_deal