"A Day of Consequence"

The House failed to pass the bipartisan bailout package this afternoon. While many Democrats voted against it and many Republicans voted for it, the majority of Republicans were opposed and the majority of the opposition were Republicans.

In response, the Dow Jones plunged 700 points, but has recovered somewhat since then.

Predictions of the ultimate effect of a failed bailout range from "just another recession" to a second Great Depression. At this point, these claims are hard to evaluate because the direness of the outcome depends on how the "ripple effect" play out (credit squeeze restricts business activity, which leads to layoffs, which leads to decline consumer demand, which restricts business activity further, which leads to more layoffs, etc.). Whatever happens, I hardly see how this could end up being a "normal" recession. I'm not convinced that it's going to be another Great Depression or even close to another Great Depression - but I haven't been convinced that it won't turn out that way either. Whatever happens, we are talking about the potential for substantial economic damage. I believe the failure of the House to pass this bill was reckless and irresponsible.

Steny Hoyer, representative from Maryland and the House Majority Leader closed the debate on this bill by saying that today was a "day of consequence". Now it's time to find out what those consequences are going to be.