When will the bailout actually help the economy?

December 13, 2008 – 12:14 am – No Comment

Banks are still failing, investors are losing thousands (if not more), families are still losing their homes. So how was the bailout supposed to help?

We, as United States taxpayers, have funded companies with $700 billion. It is OUR loan to THEM. However, the economy is still sub-par and there are no investments that we can put our money in for safety with the guarantee of even a tiny profit.

Short run T-bills have 0% interest rate. From what I’ve learned in my managerial finance class, when the T-bills is at 0% that means the risk free rate of interest on an investment is 0% and anything above that (such as on a corporate bond) included a default and market risk premium. (To me) that means any coupon rate on a bond (corporate, municipal, etc) is all risk…

The point I’m trying to make is that the bailout was supposed to help the economy…so when will that happen. There are thousands, if not millions, who are losing their retirement funds in the market. When will they be bailed out?