It may take some time before the $700 billion federal bailout plan, approved by Congress and signed by President Bush last week, has a positive effect on the economy.
“The impact is not going to seem immediate … so apparently confidence has not been restored, and the financial crisis is spreading to Europe,” Thom Dammrich, president of the National Marine Manufacturers Association, told Soundings Trade Only this morning. “We need something to restore confidence. Maybe we just need time for this to take effect.”
Phil Keeter, president of the Marine Retailers Association of America, said he hopes the bailout will settle some of the unrest in the financial markets. He said the uncertainty on Wall Street and the limited availability of credit is really starting to affect dealers.
“I’m glad they did it, and I’m glad they did it so quickly,” said Keeter, who spoke with Soundings Trade Only this morning, of the bailout plan. “I want to see the unrest brought to an end.”
As he prepared to sign the Emergency Economic Stabilization Act of 2008 Friday, President Bush noted that a major problem with America’s financial system is that banks have restricted the flow of credit to businesses and consumers. Many of the assets these banks are holding have lost value. As part of the $700 billion bailout plan, the federal government will purchase some of the troubled assets and create a new government insurance program to guarantee the value of others.
Bush said the bill has other provisions to help American consumers and businesses, including tax incentives for businesses to invest and create jobs. It temporarily expands federal insurance for bank and credit union deposits from $100,000 to $250,000, and provides families with relief from the alternative minimum tax.