Treasury Secretary Timothy Geithner announced the decision that the financial bailout program will continue until Fall of 2010 in order to prevent a second recession.
The announcement was made via a letter directed toward House and Senate leaders wherein Geithner claimed the bailout continuation is "necessary to assist American families and stabilize financial markets."
Economists have been predicting something along these lines in recent weeks, worrying that the recession could easily reverse itself if bailout money disappeared too quickly. Still, the decision is likely to frustrate many Americans who feel the $700 billion program has done little to ease unemployment and deteriorating home loans. Instead, there has been considerable aid to Wall Street firms, which have been demonized in the media for their involvement in the credit crisis.
Despite the public’s distrust of its execution, the Troubled Asset Relief Program, which was scheduled to end at the close of 2009, will extend until October 3, 2010 in accordance with Geithner’s orders.
"The recovery of our financial system remains incomplete," Geithner informed lawmakers. "And, near-term shocks to that system could undermine the economic recovery we have seen to date."
Even with the extension; however, Geithner predicts only $550 billion of the allotted $700 billion will be spent.
The additional time and money will be concentrating on cutting down the number of home foreclosures, supporting small banks and helping to bank roll small businesses.
Geithner and the administration imagine that aid to each of these areas will reverberate into general economic health. Curbing foreclosure will help stabilize the real-estate and housing markets, aiding small banks will encourage lending to small business and aiding small businesses and consumers will kick start hiring and spending.
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