US treasury leaves original $700bn strategy

Before the Bush administration expires two months from now, the US treasury has already sketched and shifted to a new lending program which aim at unlocking the consumer credit market. The plan was pushed through due to the failure of the first 700 billion strategy rescue plan.

As envisioned, the Treasury would put up about 5 percent of the money that a company would use for lending and private investors would put up perhaps 20 times that much by buying bonds issued by the new program.

Despite the mind-boggling amount of money that Congress has authorized the Treasury to spend — $350 billion immediately, and another $350 billion that Congress would approve under a fast-track procedure — Mr. Paulson is running short of money and time.
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