U.S. Heading for Slump, With or Without Bailout

Politicos and talking heads in the financial media backing the bailout of the financial services industry argue that the government stands to make money on the rescue plan proposed by Treasury Secretary Henry Paulson. But according to a new report, that profit is unlikely.

“And it looks like Washington will be taking an equity stake in any company that takes part in the plan, which means there’s even a chance to make money rather than lose it,” CNBC “Mad Money” host Jim Cramer said on his Sept. 23 show.

But according to a September 2008 report from the International Monetary Fund (IMF), the chances of the government recouping anything more than just a fraction of the bailout costs is unlikely. Alex Patelis, head of international economics at Merrill Lynch, explained the report and cited history as an indicator on CNBC’s Sept. 29 “Squawk on the Street.”

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