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MARCO WERMAN: I'm Marco Werman. This is The World. There were two major economic developments in Washington today. One was the Senate passing a stimulus bill. Now, lawmakers need to iron out differences between House and Senate versions of the measure. The other development was the long-awaited announcement of the Obama administration's new financial bailout package. Treasury Secretary Tim Geithner unveiled it. It's a massive plan worth $1.5 trillion dollars, and it's designed to soak up bad assets from banks and unleash a wave of new lending. The markets reacted skeptically; it's not just the American economy at stake, but the global one, too. The World's Jason Margolis begins our coverage.

JASON MARGOLIS: Most economists acknowledge that the current global recession began in the United States, and the recovery can begin here as well. So bankers, economists, and policymakers throughout the world were waiting to hear what Timothy Geithner had to say today. Geithner began his 20-minute speech outlining how the world got into today's economic mess. He spread the blame all around: between governments and banks, investors, regulators, and financial executives. Geithner said there were failures across the financial system.

TIMOTHY GEITHNER: And these failures helped lay the foundation for the worst economic crisis in generations. And when the crisis began, governments were slow to act. When action came, it was late and inadequate.

MARGOLIS: Now, Geithner said, economic policies moving forward must be comprehensive and forceful.

GEITHNER: We believe that action has to be sustained until recovery is firmly established. In this country in the 1930s, in Japan in the 1990s, and in many cases elsewhere around the world, crises lasted longer and they caused greater damage because governments applied the brakes too early. We cannot make that mistake.

MARGOLIS: Geithner then went on to outline a three-pronged attack. First: More government money and more scrutiny for struggling banks. Second: Expand lending to get credit flowing to consumers and small business. And third: the creation of what Geithner called a “public-private investment fund.”

GEITHNER: And this program will provide government capital and government financing to help leverage private capital to help get private markets working again.

MARGOLIS: Wait. What was that? If anybody would understand what Geithner just said, Andrew Hilton is high on that list. He directs the Center for the Study of Financial Innovation in London. His reaction?

ANDREW HILTON: My reaction is I suppose the same as the reaction of the markets. And that is I don't really understand what he was saying. What's actually new and what's actually initiatives which were announced earlier is not clear.

MARGOLIS: Bankers and policymakers around the globe may be equally puzzled. In Asia, they're looking for cues from the Obama administration. Derek Scissors, an Asia economy expert at The Heritage Foundation, says China, Korea, and Japan are under tremendous short-term pressures. Those nations have a lot riding on a quick economic recovery in the US.

DEREK SCISSORS: The numbers are pretty stark. Japan is looking at a 10 percent drop in GDP in the 4th quarter. We had a 3.8 percent drop, and 3.8 percent is awful. But 10 percent is just staggering. Obviously, you know, the industrial production is dropping in response to loss of their export markets, so they're very concerned about when their main export market, us, is going to get back up to speed because they're looking at unprecedented economic contraction.

MARGOLIS: But, Scissors says, you don't turn around the world's economy with a press conference.

SCISSORS: You know, the US does have to lead the world out of this recession. We're the biggest economy and most to the point, we contribute the most to the world economy through our demand for imports. But it's not a question of, “let's pay attention to what he's saying right now.” It's more an examination of, “What will the US policy be next month? Next year?”

MARGOLIS: And while the markets and the media want solutions in minutes, economic policies – certainly those crafted on a global scale – take time. That's a point Timothy Geithner underscored today. He said now is the start of the repair process. For The World, I'm Jason Margolis.

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