Experts: Bailout didn't cure U.S. economy

WASHINGTON, Oct. 5 (UPI) -- The U.S. government bailout of American financial institutions may not cure all that ills the national economy, experts say.

What the Emergency Economic Stabilization Act may do is spare the U.S. economy from what could have happened were the markets left to correct themselves, The Dallas Morning News reported Sunday.

Analysts say the legislation signed by President George Bush last week could help steer the United States out of economic catastrophe in less than 18 months.

Even so, Dean Baker, co-director of the Center for Economic Policy and Research in Washington, said the U.S. economy is headed for some turbulence.

"We're in for some pretty tough times, even if we do everything right," he was quoted by the newspaper as saying.

As short-term credit markets seized up, economic worry was spread around the world.

"The panic and anxiety out there has to be dealt with," said University of Texas economist James Galbraith, who said he would have preferred that the government use the Federal Reserve as a financial backstop for credit-market mechanisms rather than a bailout.