Okay well l am 14 years old & l keep hearing about all of this stuff on the ''700 billion $ bailout'' and that we are going into another depression. l am really scared and l do not understand any of this stuff! l have tried to research it and l still dont understand it because of all the confusing terms! Can somebody please help me clarify on whats going to happen!

We are in an economical crisis because everybody bought there houses when they were wayyyy up and now that they have gone down, they are paying banks more than the house is worth so they just leave their house. A buch of baks end up wiith homes the cant sell

PLZ vote me best answer it took a long time to type

It is a complicated issue, even for those who make it their business to understand our economy.

The long & short of it is this. For many years home values increased steadily, year after year. Between the late 1990 is & 2006, home values rocketed upward much quicker than they really should have. What this meant for average everyday people like u & I, is that people who owned a house, purchased for $100,000 in 1985, & who had it half paid off in the year 2000 (owed $50,000 on it) suddenly realized their home was worth $200,000! So they figured, well, l could take out a loan of $150,000 to pay off debt, buy a boat & a new car & take the family on vacation. l will then owe $200,00 on my house & deal with a larger monthly mortgage payment, but home values will keep going up, l will just refinance & do it all again in a few years & cash in again. Surprise! The home market crashed, house values dropped by as much as 40% in some areas, new home construction stopped because unsold built homes were sitting there empty & unsold. The people who refinanced to get cash out of their homes were stuck with homes that they owed more on than they were worth, some foreclosed on the home (gave it back to the bank), some just walked away, some filed bankruptcy.

So multiply that example by millions of americans & we start to see how big of a problem this was becoming. All these banks who were lending money to home buyers started to see their loans not being repaid, panic ensued & those ''toxic loans'' started plummeting in value (to the banks, lending institutions & investors).

Here we r today, our tax dollars will be used to bail out the greed of the American people as a whole, & the greed of Wall St. investors.

Will it be the next ''great depression''? Not likely, but it is one heck of a sticky, expensive mess for sure.

Hope that helps.

we spend more than we produce as a country means all of us. in time this happen over the last six or seven years means there was a lot of money in the streets(credit which can be healthy if we us it wisely)but at the same time a lot of people use the credit to buy more than what they can pay.so when this credits can not be paid(one person no big deal,100,000 u can worry,millions,they affect all of us).it is the situation now.
solutions like the 700 bailout change the scenario from what happen in 1929 government did not do anything today they doing something kind of a band aid.
buy those bad credits from the banks( bank assets) who owns them helps banks & credit payers.
this r the facts but u can not blame neither banks or the credit payers because in the last seven years conditions make both of them dream not put their feet on earth.