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Fallout: The Financial Crisis

Budget stashes billions ‘just in case’

Dan Grech Feb 26, 2009
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Fallout: The Financial Crisis

Budget stashes billions ‘just in case’

Dan Grech Feb 26, 2009
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TEXT OF STORY

Renita Jablonski: President Obama unveils his budget today to Congress. An expensive health care package and tax increases on the wealthy are catching headlines. But also tucked into the 10-year spending plan is $250 billion for the reeling banking system, just in case. Marketplace’s Dan Grech reports.


Dan Grech: Four months back, the Bush administration passed a $700 billion bank bailout known as the TARP.

Real estate analyst Jack McCabe says it will take trillions to get the credit market going again:

Jack McCabe: We literally have over a $2 trillion shortfall in spending over the last few years, and the $700 billion only replaces about a third of what’s necessary.

Obama’s proposed budget sets aside another quarter-trillion dollars for the banks. The president is calling it a placeholder that he may not have to use.

But McCabe says down the road, even more funds will have to be set aside:

McCabe: Well, I think the money’s always available, because the one thing the government has that the rest of us don’t have is a printing press.

McCabe says the bigger hurdle is the willingness of the American people to saddle their grandchildren with debt.

I’m Dan Grech for Marketplace.

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