The economy was going off a cliff when Obama got the bailout package approved and initiated. Jobs were being lost at a rate of 750,000 per month, and the stock market was plunging. If the package had not gone through to slow things down and stop the panic, the country most likely would have headed into a full-blown recession.
The banking system is the foundation of our economic system. If the government had not intervened with the bailout, the banking system would have collapsed. Once the banking system collapsed, the rest of our economy would have collapsed, too. It looks like the bailout succeeded in saving the banking system and preventing a depression.
These companies that got bailed out are a big part of our country and, if they failed, we would have failed along with them. I would rather have the government help them, rather than have us go into another depression.
Providing stability to the banking and financial systems was paramount during the US financial crisis. Without government intervention, fear and panic would've seized control of most financial markets worldwide causing over-extended catastrophe to otherwise already "stressed" marketplaces. Creating stability in the U.S. allowed other distressed countries to take refuge in the dollar and financial instruments here to avoid or lessen risk.
Some of the ideas will have direct benefits to the citizens of this country, but too many are benefiting only big corporations. I think we need a huge influx of money into the economy, but let's have it actually help individuals and build strong communities and a strong country, not just strong corporations. Banks and other big businesses that are getting the money have the primary goal of making a profit - that is their duty to their shareholders - they are not there to improve anything else. So, yes, we need a bailout but it needs to benefit the citizens of this country.
I think at the time the bailout was initiated the country was still stalled. It gave people hope and that jump started the economic rebound. There is still a way to go of course but optimism has recovered for the most part and that is what ends recessions a lot of the time. The stability that it provided to all but the worst of the financial sector allowed consumers to carry on their usual lives with as little disruption as possible and that was key.
I don't think anyone is happy about giving $700 billion dollars to greedy, incompetent bankers (except the bankers of course). However, the reality is that allowing all of the major lenders in the United States to fail was not an option if we wanted our economy to survive. The greatest crime is it looks like there will be no policy reforms made to avoid a similar meltdown from happening in the future.
Some believed that we should have "weathered thstorm" so to speak and should not have approved a bail out plan. However, this approach would have left the country in economic ruins. Some storms you have to take preventive measures, whereas others you simple can just ride out. This was not one of the storms that you could ride out. Also, it is not like President Obama all of a sudden came up with the idea himself. Don't people realize that there are teams of economists who have studied for years and years in order to help assit the President in making decisions and coming up with plans. The president is just the "face" behind many people who are working har to ensure that the US remains a strong global leader in today's market. This plan was a good start that will lead to the improvement of the economy, however, it will take time. Has anyone ever heard of a snow ball effect. It starts off as a small ball and as it rolls down a hill it becomes larger and larger. President Obama's plan has slowed down the snowball but it will take years of good policies and most importantly Americans coming together in order to push this ball back up the hill. This means Democrat and Republicans coming together to make this country even greater, and not bickering against each other.
I'm no economist. But some facts about the stimulus plan seem reasonably clear. Without rapid, significant action, the economic downturn would have been far worse. Jobs would have been lost in greater numbers because businesses could not raise the capital to invest and grow, or in some cases, even meet payroll. As jobs were lost, consumer spending would have plummeted even further, leading to the loss of still more jobs. A downward spiral was in the offing, and government spending to boost demand and confidence, create and preserve jobs, and promote banks' lending again was a reasonable reaction to the worst crisis since the Depression.
The idea wasn't good, bailing out financial institutions that probably created the financial crisis, but nonetheless if banks fail, everything else fails. The bailout was inevitable because BIG institutions were involved plus international markets too. We borrow money all the time, the idea that "we didn't have money to begin with" contradicts what most people do. Borrow for school, cars, house, start a business, then repay.
The $700 billion bailout for the U.S. financial crisis was not a good idea, because the government did not have the $700 billion dollars. The government should have let the market decide which businesses fail and which businesses prosper, rather than penalizing success and rewarding failure. The government, businesses, and individuals make decisions which have consequences. If we make a mistake, and don't have to suffer the consequences, there is no incentive for not repeating the same mistake over and over.
The 7 billion dollar bailout saved the banks from failing in '08, but the underlying problems that caused the disaster were never corrected, and these banks have not changed their ways. On top of that, much of that printed fiat money will come back to bite the taxpayer in the form of inflation. The CEO's of these banks are getting even bigger bonuses, the people are still hurting, and nothing has changed. We will see another financial disaster in the near future as the bailout was only a band aid to the problem.
The $700 billion bailout plan for the US financial crisis was not a good idea because it ultimately did not work. It seemed crucial at the time, but the money was ill-spent and not properly taken care of by the companies that received it. Those companies are now making record profits and instead of sharing it with their employees or hiring new ones, they are giving the CEOs multi-million dollar bonuses for their financial malfeasance.
Yeah great, we're in debt, so how about we put our economy in even more debt? That makes sense. I don't understand it at all. Personally, I am 23 years old, I own a car and a house and have no college degree. I barely have my GED. I understand that people are out of work, I just don't understand why. There are so many opportunities out there. I think the bill was a terrible idea. It just furthered our economy into another debt crisis.
The problem that arose from the bailout was that all the companies wanted this money so they could stay open, but all they really needed to do was cut back on some of their luxuries. I mean do they really need to have private jets and grand vacations and what not?
The bailout just put us in more debt with China. Our grandchildren will be paying for it for years to come. With all the taxes we pay, we should not have to borrow from any country. Government should learn how to handle our money better, and stop bailing out other countries.
The 700 billion did nothing for the American people overall. It did not replace the jobs that were lost; it has not reduced the number of unemployed, which is far more that the reported numbers on unemployment benefits. There are many in the country that simply do not qualify for unemployment benefits, and are never included in the percentage of unemployed. This money did nothing more than pad the pockets of the rich bankers.
The last depression in US history was caused mainly due to lack of credit. Bernanke and Paulson pushed for the $750 billion bailout so banks would 'lend' and investors would feel comfortable again. Investors felt better, but the banks lent out less money than any time in US history, the markets continued to decline, unemployment rose to over 10%, millions of families lost their homes to foreclosure and Wall Street banks that got the bailout money paid themselves a record $135 million in bonuses with that money, bought US Treasury Notes and bonds and thereby loaned the same bailout money right back to the same government that provided them the money! And in the end, all the banks were merged creating 10 US banks that now hold 77% of all US bank assets. The trillions in debt can never be repaid. There were dozens of methods to prevent a collapse but in the end Americans must resign themselves to the fact that Wall Street and Washington DC. Are one and the same...Bought and paid for.
If they can't fail, how will they ever learn from their mistakes? They won't because it was never a mistake - It was planned ! Now the wounds will only fester & become a bigger problem for the working class. They want everyone to be in debit, Everyone looses investments, savings, businesses. Only the bankers win! So much for moral hazard.
The banks that had to be bailed out had made terrible decisions. Like many others have said if you reward or do not punish bad decisions than they will be made again in the future. By not allowing the risk takers to fail we have welcomed the opportunity for them to put us in a bad situation again.
I do not have faith that the $700 billion bailout plan will resolve the U.S. financial crisis, but I do feel that it was a necessary evil if the government is going to continue to operate until a better long-term solution can be devised.
We are no better off than we were before the bailout. Actually, we are worse off because there is another $700 billion that someone is going to have to pay off. Spending money like that could cripple the country for generations, because it will take so long for taxpayers to pay all that off.
While a bailout in at least some shape or form was needed during the financial crisis to help stabilize businesses and to reassure consumers so that events did not snowball and get worse; the plan was flawed because there was no stipulations as to how the money would be spent. As a result, too much of the money went in to bonuses which actually ended up rewarding those who in some cases actually helped cause the problem.
In 2008, the U.S. government crafted a bailout plan to steady a teetering economy. Although a radical solution was required, the methodology of distributing the funds have not corrected the basic problems that created the crisis in the first place. The Treasury distributed the funds to the same corporate entities that caused the crisis, with lack of regulation, poor lending practices, and an alarming standard of rewarding greed with monetary bonuses. Rather than assist average Americans with keeping their homes, or creating jobs, the monies helped shore up banking institutions, without any requirement to change the practices that caused the crisis. Furthermore, there have been no prosecutions of the main players that allowed the unethical lending to go on. Now, a few years later, consumer spending and joblessness have kept the recession in place, while bankers continue to earn million dollar bonuses. The government can not invest in infrastructure or jobs programs, because all the available borrowing from overseas has only further enriched the already wealthy.
The government taking taxpayers money to throw at an economic downturn in the hope to a miracle was ill conceived and fiscally irresponsible. The fact that it was money that our children will have to be accountable for is secondary. There were other methods that should have been employed to stimulate growth. Reducing business taxes is one such method. Much of the money was spent on projects that proved to be worthless, cash for clunkers for example.