Geithner Unveils Bailout II

With Obama's stimulus plan advancing in Congress, Treasury Secretary Tim Geithner fired the opening salvo in the administration's next great battle--a new plan to rescue the financial industry. "Without credit, economies cannot grow at their potential and right now critical parts of our financial system are damaged," Geithner said at this morning's announcement of the new plan. Acknowledging public anger over bailing out many of the executives who helped cause the current crisis, Geithner said that the rescue was "not for the benefit of banks, it is for the businesses and families who depend on banks." At the heart of the plan is the creation of a "bad bank" financed by private capital but bolstered by guarantees from the federal government as well as a fresh injection of capital into banks to try and increase lending. The price tag for the new bailout could reach up to $1.5 trillion and will include funding to help homeowners who are threatened by foreclosure to restructure their loans.