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The House Of Representatives has just defeated the $700 billion bailout bill that would have bought the junk loans from several banks and lending institutions in an effort to shore up the economy and loosen the tight credit market.
The Dow Jones Industrial Average was down 600 points right after the announcement of the failure of the bill to pass, and as of this moment is down 500 points.
According to CNN.com:
The measure needs 218 votes for passage, but it came up 13 votes short of that target, as the final vote was 228 to 205 against. About 60% of Democrats voted for the measure, but less than a third of Republicans backed it.
President Bush is "very disappointed" by the House vote, his spokesman Tony Fratto said.
White House Spokeman Tony Fratto said on CNN, "America's credit
system is broken and will be broken until we take steps to fix it."
Like I wrote in my post last week Corporate Welfare: Time To Cut Them Off! personally I'm willing to sit back and see what happens now without a $700 billion dollar welfare check being Fed Ex'd to Wall Street.
I'm not an economist and I don't understand everything about business economics, but I'm willing to see what happens if some of these banks and lending institutions go under. Part of me truly believes this is one more big blackmail attempt by Wall Street to pick our pockets and this time it's failed.
Let's see if Congress can come up with a more modified plan that doesn't involve $700 billion, but does involve more accountability by these companies that made bad business decisions. If that accountability means they go under---and we use a chunk of that money to help support the people who will lose their jobs---so be it.