US government to purchase mortgage debts

29 September 2008

US politicians have unveiled a deal which could see the government spending $700 billion buying mortgage debts and other ‘troubled assets’ from lenders.

Many US citizens disapprove, and the original plan has already been altered to include provisions designed to protect the interests of taxpayers and the country as a whole.

According to CNN, Senate Majority Leader Harry Reid believes the Senate ‘can move on the legislation by Wednesday’.

If approved by both houses of Congress, the Emergency Economic Stabilization Act could provide confidence in the financial system and ‘end the credit crunch’, as the BBC puts it.

It’s an issue with far-reaching consequences, as the state of the US financial markets affects people all over the world. The Act could have particular relevance for people looking for a loan or mortgage, as it should make lenders more willing to lend money.

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