Did Washington Act Too Soon?

More than two weeks ago, politicians began talk about a bailout plan. While they were in their respected offices, the voice of the people was loud and clear about not wanting the bill passed. However, Washington did not agree and further pushed it along with the end result of having it pass within just a week of the very first draft.

Well, the people were still in opposition of the bailout plan and with due respect. As they watched gas prices drop, they also watched the markets drop in record time. With growing frustration, and little to no retirement left in their IRA or 401k accounts, many wondered what or who was next.

Time has now shown this weekend, that this was not limited to only here in America. It has also shown that the initial $700b+ wasn't enough. Those voices on the street with enough common sense, knew that this was a global problem. This because of the ever increasing global economy.

With most markets trading lower and lower than ever, it put a strain on many governments to act with haste. This weekend, the G7 met to discuss what measures would need to be taken by the respective countries in order to stabilize the trading markets. So, what was discussed? More importantly, what was agreed on?

Here is the G7 Plan of Action:

The G7 agrees today that the current situation calls for urgent and exceptional action. We commit to continue working together to stabilize financial markets and restore the flow of credit, to support global economic growth. We agree to:

1) Take decisive action and use all available tools to support systemically important financial institutions and prevent their failure.

2) Take all necessary steps to unfreeze credit and money markets and ensure that banks and other financial institutions have broad access to liquidity and funding.

3) Ensure that our banks and other major financial intermediaries, as needed, can raise capital from public as well as private sources, in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses.

4) Ensure that our respective national deposit insurance and guarantee programs are robust and consistent so that our retail depositors will continue to have confidence in the safety of their deposits.

5) Take action, where appropriate, to restart the secondary markets for mortgages and other securitized assets. Accurate valuation and transparent disclosure of assets and consistent implementation of high quality accounting standards are necessary.

The actions should be taken in ways that protect taxpayers and avoid potentially damaging effects on other countries. We will use macroeconomic policy tools as necessary and appropriate. We strongly support the IMF's critical role in assisting countries affected by this turmoil. We will accelerate full implementation of the Financial Stability Forum recommendations and we are committed to the pressing need for reform of the financial system. We will strengthen further our cooperation and work with others to accomplish this plan.

With this plan in action, it causes many to ponder whether Washington acted too soon. Certainly, it makes more sense to take a step back when trying to enact such a broad bill, and meet with these countries to come up with a global plan. Global economics is not limited to only Americans, but is open to all.

Many in Washington seem to be left scratching their heads at how they couldn't have come up with this plan. Many people are left wondering why Washington tried to act so fast versus taking their time and coming up with such a plan.

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