U.S. Goverment Finally Comes Through with Financial Relief for Consumers

WASHINGTON (AP) — The government introduced a pair of new programs Tuesday that will provide $800 billion to help unfreeze the market for consumer debt and to make mortgage loans cheaper and more available.

The new programs from the Federal Reserve and Treasury Department are the latest effort to provides billions in government support to get the U.S. financial system back to more normal operations and keep the country from sliding into a deep and prolonged recession.

The Fed program for consumer debt will lend up to $200 billion to the holders of securities backed by various types of consumer loans such as credit cards, auto and student loans. The goal is to provide greater demand for these securities as a way of lowering interest rates consumers are paying and to make these loans more available.

Treasury Secretary Henry Paulson had signaled that the government was working on this new program. It will be supported by $20 billion of credit protection provided by the $700 billion government rescue fund.

The Fed also said Tuesday it will buy up to $600 billion in mortgage-backed assets in a separate attempt to deal with the financial crisis.

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