What are the direct implications of the new bailout bill passing?

There seems to be a lot up to interpretation about the implications of this bailout bill. How will it actually affect the economy? The way I understand it, the money will cause speculators to want to invest in certain stocks, and will artificially raise the dow, but only artificially. And also nobody knows where the money will actually go to and is up to "agency discretion". However, there is so much back and forth that I am unsure as to how this bailout is supposed to bail us out.

$800 billion is a lot of money, but it still doesn't seem enough to cause hyperinflation as another thread has suggested.

What I want to know is exactly how this bailout bill is supposed to work. How will it affect the economy? Can anyone explain?

[edit on 2-10-2008 by italkyoulisten]

so... nobody knows what the deal is?

This is a good explanation of how it will NOT work, but should show the implied intent. from NY Times: freakonomics.blogs.nytimes.com...

If $800 Billion is given to the banks, it will become $8 Trillion in the market, because of fractional reserve banking, they can lend $10 to every $1 they have.

$8 Trillion quickly dropped into our system will create hyperinflation.

reply to post by redhatty


But we do not know where the money is actually going, if it is going to banks or not.

I wonder if there is anyone out there that can actually explain how this is supposed to work/help.

reply to post by italkyoulisten


Well some of the more honest politicians (as if there is such a thing) have flat out said, this $$ is going to go to foreign investors, not to US banks.

Look around you, go read the thread I started, Have you or someone you know been affected by this "credit crisis"

The US is gonna pay off bad debts held by foreign investors so we can borrow more money from those foreign countries

That's treason!

reply to post by redhatty


I have heard this idea as well, but I can't seem to verify it.

The main argument for this bill to pass that I've heard is that "it's better than doing nothing."