An additional $600 billion, not included in the original TARP bailout, would be used to buy mortgages -- $100 billion purchased directly form Fannie Mae and Freddie Mac, and $500 billion spent on mortgage-backed securities, pools of mortgages that are bundled together and sold to investors.
Paulson said today's newest initiatives were small pieces of an historic program, and that there was no one solution the government could implement to rescue the economy.
"It is naive for any of us to think that when you are dealing with a situation of this magnitude that a bill could be passed or a single action taken to make all the issues go away," he said.
Paulson didn't specifically say where the government would get the money from, but it would likely print more dollars and borrow in the Treasury markets.
"It's a combination of things," said Ritholtz. "They'll print money and inflate our way out of the current situation -- essentially devalue the dollar, print more dollar bills and print more notes."
Economist Joel Narroff said the government would likely borrow the money.
"The government will borrow, essentially run up the debt. We're looking at a deficit in the trillions of dollars. We'll worry about the deficit later. At this point, Paulson is saying, 'Where are the fires, and trying to pour water on them as much as possible,'" he said.
Paulson must go to Congress to get the second $350 billion remaining in TARP, $200 billion of which was pledged to asset-backed securities such as student and car loans.
Paulson said there was no timeline for going back to Congress, but that the $200 billion was "a starting point."
Under TARP, the secretary is required to return to Congress to receive the second half of the program's total allotment of $700 billion.
Of the first half, some $290 billion had already been allocated. The first TARP tranche of $158 billion was dispersed on Oct. 28 to nine banks: Bank of America, Bank of New York Mellon Corp., Citigroup (thought it later received more money), Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street Corp., Wells Fargo and Merrill Lynch.
An additional $91 billion was allocated Nov. 14, leaving some $60 billion unallocated.