How the Toxic Asset Plan Helps Me

Well, the new plan is out. The goverment will buy up toxic assets from troubled banks. After doing this they will sell them at discounted prices in an auction format. How will this toxic asset plan help me and you? It's quite simple.

The new plan will be put into motion with tax payers dollars, so all Americans will be paying for the solution (However the tax might not be as big as we all think, since these bad assets still have good value). You won't see any immediate effects, but it certainly will help the banks. I know, I know. This isn't what you want to hear. However, the way I see it is that it really is the only solution. We will all see results in the future. It will be easier to obtain loans. We will be able to get mortgages at lower rates. We will be able to refinance our mortgages at lower rates. Entrepreneurs will find it easier to obtain business loans at low interest rates.

With the increase in loans being made, the country becomes more productive. The Stock market will increase, there will be more jobs, and real estate values will start to inch their ways back up.

The negatives of this plan?
- Increase in taxes (pehaps only a small amount).
- Increase in inflation as the economy begins to pick up.

All in all, I feel this is a good move on the part of the government that should and will work.