Federal Reserve official says stimulus funding is 'not a bailout'

BELLEVILLE -- The federal government is assuming risk at a reasonable price with its $700 billion economic stimulus funding, said an economist with the Federal Reserve Bank of St. Louis.

But don't call it a "bailout," said Chris Neely, an assistant vice president with the Fed.

"I hate the term 'bailout.' It's not a bailout," Neely said. "We're not doing this because we love the fat cats on Wall Street."

Neely spoke before local business leaders at the Greater Belleville Chamber of Commerce's Issues & Eggs Breakfast meeting Wednesday morning and indicated that his views were not necessarily those of the Federal Reserve Bank of St. Louis.

He discussed the events that lead up to the current economic decline. He explained that the housing mortgage crisis led to record foreclosures and then resulted in bond holders and bond insurers losing money. He compared the aftermath to a plane crash.

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