US Senate passes rescue plan, tough battle ahead
However, many Republicans remain opposed to the plan.
Opponents warn that spending will not be properly controlled and will lead to greater debt in the future.
The Senate voted 61-37 to approve its version of a rescue plan, with support from only three Republicans. Earlier, the House of Representatives passed its own $US 819 billion package, which received no Republican votes.
Now a tough battle is expected as the two houses of Congress have to come together to create a comprehensive bill that can be signed by the President by the end of the week.
Diana Furchtgott-Roth, Senior Fellow from the Hudson Institute, claims “the state doesn’t know how to manage different industries,” and “part of what’s causing the problem is that the state is interfering too much [in business].”
She went on to say, “The state is saying that they might lower mortgages. As a result, no one is buying houses because they are waiting for a lower mortgage.”
“The state has stepped in to perhaps bail out some of the banks. As a result, no one wants to buy the assets of the banks because they think that the government might intervene in the future, resulting in a lower price,” she said.
Furchtgott-Roth believes that the American economy “needs less intervention rather than more intervention.”
However, not everyone shares this opinion. Rep. Dennis Kucinich, a member of the House of Representatives, says today’s legislative action was only a first step.
“We need a massive stimulus that puts hundreds of billions of dollars, and even trillions of dollars, into starting the economy and putting millions of people back to work,” he said.
‘Economy is killing people’
“People are literally killing themselves because they cannot take the economic pressure,” said Dennis Kucinich. “We’ve got a situation here that is a disaster,” he added.
And many Americans agree that it really is a disaster.
“For me it’s been a disaster, and for everyone I know it’s been a disaster,” said one Washington resident.
As to what Americans can expect from this now infamous stimulus plan, James Pinkerton from the New America Foundation believes it will be “a long period of enormous ”stimulus“ with very little growth and a deeply lagging economy.”
“The idea of solving it by taking the same pirates who stole the first trillion dollars and saying here’s more money. You look up the word ‘corrupt’ in the dictionary and that’s what you see,” he added.
According to Dennis Kucinich, “the government has become an engine for taking money from the people, from their pocketbooks and purses and accelerating it to the top.”
James Pinkerton says that if the problem America found itself in was too much debt, then how can adding more debt be helpful?
“Obama is going to poison his own presidency because he’s got Geithner [Secretary of the Treasury] who is identical to Paulson. Like Bush, Obama is not smart enough to see that he’s getting ripped off by the same people who ripped off his predecessor,” he said.
And the last thing the American people want to be is ripped off .
“That’s an awful lot of money that we are all going to end up having to pay back,” said one Washington resident. Said another, “Now we the taxpayers, my grandkids that aren’t even here, are going to be paying for this bailout.”
‘Only government can break the vicious cycle’
Earlier, speaking at a media briefing in Washington, President Obama said the federal government is the only body left with the resources to jolt the U.S. economy back to life.
“This is not your ordinary, run-of-the-mill recession. We are going through the worst economic crisis since the Great Depression,” Obama said.
He added that passing the $US 838 billion stimulus package was necessary to fight the ongoing economic collapse. Obama said, if things go right, “starting next year, we can start seeing significant improvements.”
“My bottom line is to make sure that we are saving or creating four million jobs,” he said, “and that the financial system is working again, that homeowners are getting some relief.”
‘No to nuclear arms race’
At the media briefing Barack Obama also touched upon U.S. relations with Iran and Russia. Unlike his predecessor, Obama believes that there’s the possibility at least of a relationship of mutual respect and progress between America and Iran.
“We should take an approach with Iran that employs all of the resources at the United States' disposal, and that includes diplomacy. And so my national security team is currently reviewing our existing Iran policy, looking at areas where we can have constructive dialogue, where we can directly engage with them,” Obama said.
The 44th U.S. President has said it is time for Iran to send some signals that it wants to act differently, and to recognise that, even though it has some rights as a member of the international community, with those rights come responsibilities. Obama expects that the possibility of dialogue with Iran will appear ‘in the coming months’.
As for relations with Russia, it is important to restart talks on effective mutual reducing of nuclear arsenals, Obama said:
“So that we then have the standing to go to other countries and start stitching back together the nonproliferation treaties that, frankly, have been weakened over the last several years,” Obama added.
The American president said that it is important for the United States, in concert with Russia, to lead the way on preventing nuclear proliferation.
“If we see a nuclear arms race in a region as volatile as the Middle East, everybody will be in danger,” Obama said.
Russia's Foreign Minister Segrey Lavrov has welcomed Obama's initial steps to cut down nuclear stockpiles.
“Russia is ready for talks that will keep the regime of non proliferation and reduce strategic offensive armaments together with defensive armaments,” he said. “We are satisfied that the new administration in Washington is paying close attention to the issue. We are ready to keep following the way of non proliferation while of course considering all aspects of Russia's security.”
Russian political analysts believe that the American president and his administration will try to show positive results in their dialogue with Moscow.
Interfax news agency quotes the Deputy Chief of the Center of Political Technologies Aleksey Makarkin as saying: “In his speech, Obama has touched upon those aspects in the U.S.-Russia relations which can give a quick result, and the reducing nuclear arms issue is among them. This is very important for a politician who has just taken the president’s seat.”