Posted September. 22, 2008 08:48,
In an urgent attempt to tackle the worst U.S. financial crisis since the Great Depression, the U.S. Treasury Department has proposed a bailout worth 700 billion U.S. dollars to buy up bad mortgage debt of U.S. financial institutions over the next two years.
The department told reporters Saturday in a statement that the bailout plan is up for congressional approval.
If improved, the bailout will be the largest undertaken by the department, imposing a cost of 2,000 dollars per taxpayer.
Consequently, Washington is expected to run its worst fiscal deficit of least 500 billion dollars for the fiscal year 2008-2009, which begins this October. The plan also requires the raising of the federal governments borrowing authority to 11.315 trillion dollars from 10.615 trillion dollars.
Global financial markets welcomed the U.S. decision, which instantly boosted stock markets in both the United States and Europe. On Friday, the Dow Jones industrial average closed at 11,388.44, up 368.75 points (3.35 percent) from the previous day.