On Monday 29 September, US politicians announced a $700 billion rescue package designed to buy bad debts and restore confidence in US markets.

Basically, the Emergency Economic Stabilization Act would give the Treasury the power to spend up to $700 billion (£380 billion) buying mortgage debts and other ‘troubled assets' (sometimes called ‘bad debts' or even ‘toxic debts') from banks.

It's a hugely controversial move, opposed by many throughout the US and beyond. Many don't feel they've contributed to the debt crisis and are not happy about spending so many tax dollars on the ‘Wall Street bail-out'.

Nonetheless, the draft Act does contain a range of provisions which weren't in the initial proposal, and which should provide some protection to tax payers.

As summarised on the BBC website, ‘the deal addresses several of the key concerns raised by both Democrats and Republicans:

• The government will get the money in tranches - $250bn straight away, and $100bn at the request of the White House; Congress can veto the release of the remaining $350bn
• Banks that accept bail-out money will have to hand over shares in return, which allows tax payers to benefit from the banks' recovery
• Top bankers, meanwhile, will see their pay limited, and "golden parachutes" - huge payments when they leave the firm - will be banned
• The banking industry will have to help finance the bail-out if the money can not be recovered from the struggling banks themselves
• Four agencies will monitor the deal, including an independent Inspector General and a bipartisan oversight board • Banks will be obliged to join an insurance programme to protect them against the losses of mortgage-backed securities.'

The White House website contains the transcript of a speech from the President, in which he says: "The bipartisan economic rescue plan addresses the root cause of the financial crisis - the assets related to home mortgages that have lost value during the housing decline. Under the Emergency Economic Stabilization Act, the federal government will be authorized to purchase these assets from banks and other financial institutions, which will help free them to resume lending to businesses and consumers."

At the time of writing, it remains to be seen whether the Act will be passed. It would mean an enormous investment of tax dollars, but could make a huge difference to the health of the nation's finances.

People and businesses looking for mortgages, loans, and other kinds of credit may be particularly keen to see it approved. For many, the credit crunch has been a time of real stress: in so many cases, an inability to get a loan or mortgage has forced them to put their plans on hold, whether they're trying to buy a house, consolidate their debts, or seize a business opportunity.