How we got in this mess does not matter at this standpoint. Those arguements can be saved for later. Congradulations to both the Democrats and Republicans for putting aside their political self interests and getting something done! Socialism does not work and dishonest capitalism is just as bad!

H. Anderson, Dallas, USA

Good balanced article, Irwin. America is in distress but that usually stirs the States to greater efforts. The worldwide recession must work its way through, there'll be plenty of casulaties, and watch China, Russia and India catch a cold along the way. Then the US will be resurgent.

Paul Freeman, London, England

"the assets acquired were eventually sold at a small profit."

According to Financial Audit: Resolution Trust Corporation's 1995 and 1994 Financial Statements (http://www.gao.gov/archive/1996/ai96123.pdf) $81.3billion had been lost on $402 billion book value.

Sounds like a 20% loss to me...

Alan Peery, London, UK

The financial fraud which has contributed to the best part of 1 quadrillion of debt has. This bailout is for 700 billion, but it is only the first tranch. Do you understand that?? It would take a human approx 36million years to count to this clearly corrupt figure (1q)Our currencies are finished!

R McAuley, Antrim, United Kingdom

I'm quite optimistic about the present bail out but : i don't think american people will allow such a mess in a close future. What about selling rotten houses to chinese ? Just joking :) Hey, that's a capitalistic world !

yono, paris, france

Yes, these dud loans may eventually be sold at a small profit but that is in many years time when inflation has erroded thier value. Inflation adjusted, these toxic loans are worthless.
If there was any chance of them making a real profit, why are'nt Goldman sach and others queing to buy them ?

aj, london, uk

Is this not just the tip of the derivative iceberg? And look at the damage which has already been inflicted on the Titantic US economy - which as we all know is too big to sink. I think commentators are becoming less assertive about the future and Irwin was until recently saying full speed ahead!

Peter, Dubai, UAE

No lending, no bailout - thats the key condition the US Government must insist upon before legislation is passed on this rescue package. Sadly with so much vulnerability out there the bigger stronger banks are hording cash so they can pick up dirt cheap assetts from the banks that fail.

Mike James UK, London, England

'A small profit in the future' Stelzer has lost sense of reality. Like most columnist and politicians he is out of touch with the real world and is reporting his outdate and unconnected view. From the war on terror, to the war on error as Jeoff Randall put it two days ago in the Telegraph!

Lloyd, Solhull, UK

I dont think people realize how much stress there is for the average American family. Bailing the banks out is stage one to the longer term recovery of the US economy. Americans work harder than Europeans and there is no slack there to be taken up!

G Townsend, Elk Grove, USA

The taxpayer should have an option to convert their payments for 'toxic mortgage assers' into share equity. In that way the banks will not prosper from their mistakes.
As for Goldman Sachs, they exacerbated the recent oil spike by predicted high oil prices. No point trusting anything they say!

Stephen Marchant, Newton Abbot, UK

Sub prime mortgages are the tip of the iceburg - next we have sub prime credit cards, personal loans and car loans. Expect a $5 trillion dollar bill, the dollar will collapse (along with the British pound - the UK economy is in a worse state than the USA) - inflation and interest rates will surge

Rahul, London,

Let Stelzer assign his money, stocks, bonds, savings and homes and all furnishings-indeed every asset he has-including the spare tires on his mercedes-to an escrow agent with full and independent power to dispose of these assets if he is wrong. Let him stand behind his words. His words are cheap!

Salvatore M. Latona, Esq., Honesdale, USA

$700 billion is nowhere near enough. The off balance sheet stuff is over $60 trillion - a one percent move would wipe out this $700 billion. The only thing it will do is prolong the agony and rescue the "friends of Hank"

The party is over. The dollar will soon be history. Long live the Amero.

Alfred, Portsmouth, UK

So - let's get this right - the human beings to whom welfare payments are made aren't assets? And are valueless?

Pete, Oswestry,

One of the people involved in the discussions said there were 58 million Mortgages in the US.It sounds a reasonable number.Several millions of those mortgages will not be delinquent.
$700 Billion dollars will buy 7 Million house at $100,000 each. That is 1 in 8 of all mortgages
What's the Problem

Ed Corbett, bridgend, wales

So welfare to ensure that the poor get food is 'spending' and welfare to ensure that the rich get their bonuses and share options is not? And as for this rubbish about 'assets with a value'! If they were worth a row of beans the Chinese/Arabs/Hedge funds would buy them.

Eric Skelton, Cardiff, W

Big lenders have removed the basic ties between borrower & lender: shared risk and mutual responsibility. When finance is securitized and sold into a global marketplace, both risk & responsibility are diluted to a point of meaninglessness - until, of course, they become globally unmanageable.

Don, San Jose, California, USA

Irwin Stelzer is right.

The role of the dollar as a reserve currency depends on the currency markets.

The question is will the BRIC and oil/gas producing nations choose to trade in Euros rather than a declining dollar, subject to constant financial shocks?

John Collins, Bromley, Kent

I agree, all we seem to get in UK and perhaps also US
these days is this left-wing defeatism. The war on terror
is lost, the economy is doomed. We need to show a bit
more courage like our parents/grandparents did in world
war two. However short selling, spread betting should be
made ILLEGAL

Roger, Weymouth, UK

Well, well. the bankers have wiped the slop of excesive profit from their chins long enough to get their hooves working on the typewriters - they need help from the sheared sheep to save the day.
Alan

Alan Baer, Whitehorse, Canada

Ah, Irwin Stelzer - the philosophical organ grinder to Bush's monkey politics. Washington 'spends' wealth and doesn't 'create' it? Who creates wealth then? Lehman Bros? AIG? Goldman Sachs? They've just sucked more wealth than a planet's worth of welfare recipients.

Mark, London, UK

my mortgage could be classed as delinquent as a result of the financial turmoil. Bail me out instead of the bankers

Andrew McLachlan, Huddersfield, England

I've never understood the logic of the perceived wisdom that currency movements take 18 months to affect the economy. Do importing companies get 18 months credit and is the conversion not carried out until then? If I buy on EBay from US I pay immediately at the current rate of exchange.

Steve, Kenilworth,

are we watching the white house banning the sale and ownership of guns without asking the people to vote,is that the scale of the scam.

michael joseph, cahersiveen.adams towns, madness.

This is what you get when people are asked to "broaden" themselves in their careers. They don't know what they are doing! Go back to the days when we had specialists in charge of each area of life and life might actually work!

Richard, Plymouth,

History is filed with cases of the empowered being totally unable to understand the degree of antipathy they evoke. They speak of reason, the common good, and such, but when one's child suffers such rationalizations are poor substitutes for generosity

glenn schaefer, holbrook, ny/usa

Mr Stelzer, the last paragraph of your article is very telling. If the largest bank failure in America has just taken place with barely a ripple in the markets it suggests that the bailout is not really necessary. If truth be said it's the biggest con job on taxpayers in American history.

anthony, london, england

EX CEO of Goldman Sachs in charge of finances....hmmm..... Lets put Boeing in charge of the pentagon, Pfizer can run Medicare and Macdonalds the FDA...

biggest corporate fascism grab since ....hmmm the last one.... that sliped past your nose dressed as some other lame excuse.

Richard, London, UK

If the economy is that strong then why have a bailout?

Charles Rossi, London, uk

I don't see how the banks can avoid lending the moneyout if they have it. Isn't lending the fundamental buisness of the banks. I mean don't they have to lend if they want to continue in business and have anyhope of making any kind of profit whatsoever?

Susan, Olney, Maryland, USA

Handing over public billions to those few meastros-of-the-universe institutions so they can hoard it means our leaders don't get it; then, we really are in a heap of big trouble. That would amount to more sheer incompetence, collusion, and theft on a gigantic scale — again. Feudal!

Janie B. Mayfield, Palo Alto, CA, USA

More rose tinted perspective on the US economy from this columnist. Nothing to see here folks, all fine, move along. I'm not sure what it would take for Mr Stelzer to recognize that the sun is setting on the US economic empire but the already glaringly obvious hasn't struck home yet.

PJ, London,

I fail to understand how 700 billion will "fix the problem" when last week alone US banks and fund mangers borrowed almost double that. - 1,316 billion.
And this: "The net effect of the Fed’s moves has not been to increase the money supply at a dangerous rate." - really!!

dhome, sydney, australia