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Washington kickstarts credit market with $200 billion in consumer loans

 
2 1,431 views Mar 5, 2009

The consumer loans are intended to help get people into cars quickly

The consumer loans are intended to help get people into cars quickly

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In a plan to stimulate the flailing American economy and instill confidence in the credit market once more, the U.S. federal government will be launching a new $200 billion program to help Americans finance large purchases. Previously, it was thought that the government could increase the program to around $1 trillion, but it seems that there is only $200 billion in the coffers of the treasury for this specific purpose.

The plan is in line with Obama's goals of improving the economy through consumer spending increases, and should prove a relief for those Americans seeking loans to purchase cars, homes and other necessary items.

Currently, the credit market has left Americans with few options when it comes to financing except to deal with excessive rates in the shrinking money market. However, if the program is successful in buying securities that are backed by debt then the credit market should ease and allow lending to begin again.

The new plan, known as the Term Asset-Backed Securities Loan Facility will require those taking loans to place collateral on the table in return for the loans, and the loans will last for three years beginning on March 25. A second round of loans will be dished out in April, and it is during this round that the government expects securities guaranteed by fleet leasing will be eligible for funding.

Should the program be successful, the world automobile market may see a resurgence in sales, as currently one of the largest factors impacting auto sales is the poor state of the U.S. car market.



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Comments (2)

  1. ma_samuelesm avatar samuelesm Posted: 3/5/2009 5:28pm PST

    Obama is a crazy idiot. Stupid media makes him look like he did something amazing but he really didn't do anything yet that benefits us.
     
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  2. ma_Bob Loblaw avatar Bob Loblaw Posted: 3/5/2009 6:17pm PST

    Not trying to turn this in to a political discussion site but he's been in power less than 2 months and implemented a number of changes that he outlined in his campaign. What exactly did you expect him to do?
     
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