U.S. Plan to Aid Citigroup Said to Be Near Approval

U.S. Plan to Aid Citigroup Said to Be Near Approval

www.nytimes.com

Federal regulators were nearing approval of a radical plan to stabilize Citigroup on Sunday in which the government would soak up tens of billions of dollars in losses at the struggling bank, according to people briefed on the discussions.

The plan, which emerged after a harrowing week in the financial markets, would be the government’s third effort in three months to contain the deepening economic crisis.

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Citigroup, just like the GM has been the pride of America for a long time. The question that comes foremost to my mind is why Lehman was not bailed out.

I think, as the article says, this sets precedent for other banks to be bailed out in similar manner

Are we moving towards socialism? What would happen if due to the current economic crisis, most of the large US enterprizes are owned by the US govt. What happens then to the spirit of free enterprize on which America was built?

Also, once the govt gets a controlling stake in large companies like GM and Citigroup, the decision making process will be in the hands of the govt. Will we see political decisions being made then, instead of economic ones?

www.nytimes.com
(visit the link for the full news article)