Paulson: No magic bullet for the economy

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WASHINGTON, Nov. 25 (UPI) -- U.S. Treasury Secretary Henry Paulson said there's no magic bullet to fix the economy and it is naive to assume one piece of legislation could do so.

At a news conference to explain the latest moves taken by the federal government to shore up the economy, Paulson said he is confident events are moving in the right direction and markets are stabilizing.

Treasury officials Tuesday contributed $20 billion to a $200 billion program announced by the Federal Reserve to help increase credit availability by guaranteeing securities issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp.

"The housing correction continues to be a major focus," Paulson said, adding Tuesday's action is "a good deal for taxpayers. There's no way the taxpayer is going to lose money on that."

Paulson said the government is working closely with President-elect Barack Obama's transition team and that New York Federal Reserve Bank chief Timothy Geithner, Obama's pick for Treasury secretary, is in a perfect position to work on the situation now and provide a seamless changeover once the new administration takes control.

Paulson said the authorities provided by Congress in the emergency $700 billion bailout plan have given the government the ability to stabilize the financial situation domestically as well as work with the central banks of other countries to stabilize the situation globally. But, he said, it will take time to get the programs up and going.

"It is naive for any of us to think when you're dealing with a situation of this magnitude that a bill could be passed or a single action could be taken and make all of the issues to go away," Paulson said.