$3 trillion! — Senate, Fed, Treasury attack crisis

WASHINGTON – On a single day filled with staggering sums, the Obama administration, Federal Reserve and Senate attacked the deepening economic crisis Monday with actions that could throw as much as $3 trillion more in government and private funds into the fight against frozen credit markets and rising joblessness.

Separately, the Federal Reserve announced it would commit up to $1 trillion to purchase bonds or other assets backed by consumer loans. The Treasury will guarantee a portion of the Fed investment by putting up $100 billion, an increase from a $20 billion commitment that Bush administration had announced. The goal of this program is to make it easier for consumers to buy cars or obtain student loans, small business loans or other types of credit that have dried up in recent months. Separately, Geithner said $50 billion in bailout funds would be dedicated to an effort to prevent mortgage foreclosure of "owner-occupied middle class homes." Few details were provided.

Geithner, who helped develop the $700 billion bailout last year as president of the New York Federal Reserve, said officials misjudged the severity of the developing crisis at the time, "failed to arrest this crisis and may have made it worse."