Bail-out plan: Views from the US

US President George W Bush has warned that the entire US economy is in danger, unless Congress quickly passes a $700bn (�378bn) rescue package to bail-out the financial markets.

In a televised address, Mr Bush said that without fast corrective action, millions of Americans faced the loss of their homes, businesses and jobs.

Readers from the US have contacted the BBC News website with their views and experiences of the current financial crisis.

Comment on our debate

Richard's house has lost value.

We bought our house at the top of the market because that was when needed a home. We didn't know the bubble was about to burst, nor, with any certainty, that there even was one. Our house cost about all we could afford because housing is expensive in LA; now it's worth about $150,000 less than what we paid for it.

This bubble was not caused by us, or by our neighbours. It was caused by sub-standard loans being offered, which by their easy availability drove home prices up. When the defaults started rolling in, the bubble burst and prices fell like rocks. And they are still falling. None of this was our fault. In fact, we had no control whatsoever over any of it.

The fault is with the government and the finance industry. The government failed to regulate the finance industry, so failing miserably to protect the economy, the investor, the homeowner and the taxpayer. The finance industry got so greedy, they "thought" that writing and selling bad loans was business as usual. It was criminal!

First it was Enron, then the S&Ls (Savings and Loans Associations), then Bush's dirty War, and now this. The American taxpayer should not be expected to pick up the tab for every giant, greedy corporate misfortune, which was in the first place designed to empty our pockets as efficiently as possible, and as recklessly as necessary, on the assumption that if anything went wrong, that we the taxpayers would pick up the tab!

In addition to our upside-down mortgage, we have large medical bills from the birth of our first child, and are in the final phases of an expensive, long-sought adoption to complete our family. And this mess may eventually put our jobs in jeopardy. We can't take any more! When are we going to get some help?

Angela thinks Americans have already paid for the financial mess.

I never thought I would live during a time where people left and right were losing their homes and their livelihoods.

People blame the foreclosures on people taking loans that they really shouldn't have taken, or that they are somehow bad people who just had no intention of paying on the house, but we were almost there about three years ago, and we were told by our mortgage company that if we paid on time for the first two years, it would then switch to a fixed rate instead of an adjustable rate mortgage.

Yes, we were stupid to believe that. Fortunately, we were in a position to get another loan and keep our house. I have two friends in two different households right now who are not that fortunate.

Most people that I talk to feel like the average American has already paid once for the mess (sky rocketing bankruptcies and foreclosures, cost of food, cost of gas) and now we have to pay again! Do we get to be shareholders in these companies now? Do we get some say on where the money goes? Or will it be another blank cheque for good old Mr. Bush. Who started this mess in the first place?

America is supposed to be one of the greatest countries in the world and yet, after living here for 15 years, I'm appalled at where we are at now.

Lance considers banks should not benefit from debt relief.

The RTC was a cash cow for the rich at the taxpayers expense, and so is this new bail-out.

Truthfully, This problem in the financial sector has been over five years in the making. The signs of this happening have been apparent to me in that time frame, and I am not an economist.

It is not a well thought out plan, it is an expensive band-aid.

What got us into this mess was massive greed fuelled by get rich quick TV, greedy bank executives pumping out refi's (refinances), home loans and HELOC's (home equity lines of credit), in order to pump up bank stock prices thus their bonus.

So, here we are in Bush Act II...the fact is there is something fundamentally wrong in the financial sector, the banks have far too much power (changes in bankruptcy laws), are too unregulated (derivatives market), and their management is making unsound risky decisions based on personal gain.

Those people losing their homes now are regular moms and pops� the shrinking economy, sinking wages and high debt burden, the wheeler dealers for the most part (investors) that inflated housing in 2004-2005 are long gone in foreclosure.

I am for debt relief and forgiveness or subsidies to individuals, but not for the banks. The bank's managers want to play in the market... they can sink, too.

More of your comments:

The bail-out plan will help bring the much needed liquidity to the financial system. I don't think this will have an immediate impact on the economic slow down in the country. I agree that there should be some checks and balances established before handing out close to a trillion dollars to an administration, the competence of which is questionable at the best.
KP, Marshall, Minnesota

I don't particularly mind getting rid of the "toxic loans" from the banks balance sheets since we really have no other choice. But to "help the homeowners" as the democrats want to do? No way!! It is those idiot homeowners who tried to live beyond their means that got us into this mess in the first place!!! ... let them eat cake.
Ele, San Diego, California

I think the question should be more like "should the government stop and reverse the financial haemorrhage before our economy bleeds to death"? It's not like we have many options and it's not like we have a lot of time. If and when this mess is cleaned up, we should go after the responsible individuals, organizations and businesses with a vengeance. We will all pay for this but if we do not bring the greedy monsters to justice, we will deserve more of the same.
Ferenc Molnar Carmel, Indiana

If this measure leads to any stability, it will be only temporary. (Is it then true stability?) The US economy is being pulled down by larger forces, all of our own making. A nonperforming mortgage is a parable that stands for the larger problem of US government fiscal policy. A homeowner with high hopes spends and borrows beyond his means, na�vely expecting that an ever-rising market will keep the money flowing. The staggering deficit and accumulating debt of the US government likewise threaten to drag our economy toward crisis. Trying to end on a positive note, I think we may avert crisis if both citizens and government take truly bold steps like living within our means, balancing the budget, and (eventually) paying off debt.
Anthony, Andover, Massachusetts

I'm a homeowner and investor who saw this coming, so my wife and I are affected, feeling poorer, but not drastically. But the Bush administration plan will only address about 20% of what remains to be worked thru. "Value" of US real estate and US securities in mid-2006 as inferred from transactions at the time was about 25% greater than market-clearing value; about 5 trillion $ was mythical, didn't exist, never had. Individuals and institutions (including gov'ts) must somehow face up to that.
Victor Vyssotsky, New Orleans

I do not believe that this bail out will not work in the end. The whole banking system needs to be reformed and the monitary system needs to go back to a gold and silver based reserve system. So let the banks fail and close down the SEC and most of all the Federal Reserve. This banking monopoly, the federal reserve and their government stooge the SEC and congress, has been the root cause of the 1929 stock market crisis, savings & loan crisis and now the current debt backed securities crisis. Why should we allow them to continue?
Phillip Schruben, Oklahoma City

No, I do not think we should buy up these bad debts... it is merely a "life-ring". What makes more sense, is to shore up businesses, by giving those companies that employee large numbers of employees and have a record for innovation and growth, major tax breaks. This may bring back to the USA those companies that have left and have set up housekeeping in those eastern and European markets, because of the USA heavy tax burden. This will provide capitol for companies to expand, grow and fuel the economy with more jobs and a greater flow of cash. May take a little time, may make the Dow drop... so who cares. They created this problem with short selling and poor management... so own the problem and don't ask the little guy to carry the burden.
Vet, Cincinnati, Ohio

A depression is imminent without the purchase of the bad debt. However, that may not be a bad situation; though recovery will take a long time. The purchase of $700bn may be a financial saver of the economy, but Main Street will not learn a lesson that Wall Street doesn't care about them. Greed and inpatients are the problem. Laws and regulations will only close the barn door of events that have happened. It will be hard to predict what ways they will come up with to accommodate the appetite. God save us all.
Quentin Beard, Sacramento, California

I don't think the lions share of the $700 billion should go to banks that made poor decisions. They should mandate that these banks re-negotiate all ARM's made in the last seven years to fixed lower rates. This should include any mortgages 30-60 days overdue and mortgages handled by "the riskiest" lenders and banks. Just throwing money into these banks does nothing but apply a band aid to an arterial wound.
Maureen Young, Kansas

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