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How was the US government planning to finance the purchase?
The US government had intended to borrow the money from world financial markets. The proposed legislation gave the Treasury the authority to issue an additional $700bn worth of Treasury securities.
The hope was that eventually the Treasury could sell the distressed assets back into financial markets once the housing market stabilised, perhaps even making a profit.
Others were concerned that issuing more government debt, and virtually doubling the size of the budget deficit, was not the solution. The sale could have made the US more dependent on foreign banks, who may be the biggest purchasers of Treasury securities.
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http://news.bbc.co.uk/2/hi/business/7631321.stm
I think even the experts are unsure as to where the money will come from at this stage.