$700 billion will give you something

“If you spend $700 billion you going to get something for it,” said Dean Baker co-Director of the Center for Economic and Policy Research in Washington DC, at a discussion on “Dissecting the Package-How Will the Markets and the Economy Respond?” at the National Press Club. The panelist discussion focused on the economic consequences of the bailout bill and what it will mean to America’s future budget.

Martin Baily, former chairman of the Council of Economic Advisers during the Clinton administration, highlighted the fact that the current lack of credit availability is affecting business and households as well. “ The collapse of house prices has lead to a collapse in construction,” Baily said.

Baker was optimistic about the current economic situation, saying America will get through the immediate crisis even if it’s not going to be easy. “… At the end of the day the Fed and Treasury have enough duck-tape to keep things going,” Baker said. He rejected the possibility of the current crisis ending up being another Great Depression, as a “long-headed”. “We are not going to have the Great Depression, that would take a lot of really bad policies over a long period of time,” Baker said. The correct way, the efficient way to do a bailout would have been direct injection of capital,”.