I believe that the world's financial system would have collapsed without the stimulus plan, because they had so much bad debt. We have learned that the housing market was in much worse shape than most thought. It will be years before the housing market rebounds. We couldn't wait that long.
Without utilizing the stimulus plan, we would be so far deep into dept that we would have riots of unimaginable control, due to job cuts and unemployment.
America was a great part of the world economic crisis. Our financial establishment helped create the "funny money" investment packages and sub-prime loans whose collapse led the way to the world economic melt down.
If we had not put the stimulus package in place, the American economy would have continued to slide deeper and deeper into recession, as it had been doing. The stimulus package did not solve the problems. The stimulus package gave us breathing room. And it did one more thing. It let the rest of the global financial world know that something COULD be done to stop the melt down before it was too late.
The economic crises was mostly because of shaky investment, but it was also about lack of faith in governments, in politicians, in the financial community, and in the ability of any of the above to stop the recession from going into a full fledged depression.
Putting the stimulus package in place sent the message that, yes, we know how bad it is and we are trying to do something about it. That was an important message.
The stimulus package did not solve the problems--it gave us breathing room--in that sense it worked.
There is no doubt that the world's financial system would have collapsed if not for the massive money printing by central banks all over the world, in the name of stimulus. The world was living in a pile of debt, and in one of the biggest asset bubbles of all times. Therefore, when spending and investment stopped, it was necessary to stimulate the phony economy. If not for the stimulus, we would have record unemployment and civil unrest. But this massive money printing will eventually lead to inflation and hyper-inflation. Simply put, this stimulus money is borrowing time to prevent the inevitable collapse of the world economy.
Things were not looking good for the economy. When President Obama took office he had to deal with national unemployment, a bad housing market, and spiraling debt. To counteract this the United States and countries around the world put stimulus plans in place. This was without a doubt the right thing to do since it stopped the bleeding. Yes, things are still bad, and yes, the stimulus did not make everything perfect. But think about how much worse things would have gotten without any assistance.
At the height of the 2008 market meltdown, the markets of the world lacked confidence and liquidity. The stimulus plan provided both and saved the world from going into a 1930s-type depression.
Yes,I agree that the world's financial system would have collapsed without the stimulus plan. The stimulus plan is the great relief for many of the financial institutions in the world. It has provided more stability and got the situation much better. Needless to say, the financial crisis was more because of greed and huge spending and more debt that the financial system got crashed. The stimulus plan comes as a huge sigh of relief for the financial institutions.
During the economic recession without the stimulus plan, many private financial institutions would have to declare bankruptcy. Due to the support of the government, it was only possible to sustain this huge blow.
Every government has to prepare for such circumstances and should be ready to support their private banks.
It is my belief that the US economy was in the worst shape since the great depression. All the leading indicators pointed to a prolonged period of recession and most economists agree that we were in a severe recession. However, the economy actually grew in the month of April, which points to a turn around that was not necessarily expected. If the US economy continued to go downhill, this would have resulted in economic meltdowns across the globe, only increasing the problems in the US. From all indications today, things are starting to turn around!
Spending your way out of life gets you killed. This is the most idiotic idea to ever be thought of. Even Dr. Suess would be calling Obama a moron for it. If I cut off my leg, do I then put lots of morphine on it? NO. That wastes the morphine. So essentially, Obama gives people he likes billions in kickbacks and "On a good faith basis", and is too lazy to come up with an actual plan.
The great depression of 1920. It never happened. A financial disaster that should have been even worse than the stock market crash almost a decade later. The government did nothing, and no one even remembers the depression that almost was the great one. Very few investors have faith in Obama right now. I certainly dont. Obamas policies have made many afraid to invest in the US economy.
The Federal Reserve stepping in to help the largest banks in 2008 kept the world financial system going. The bailouts to the largest banks averted a system crash. The stimulus was mainly wasted, in that the wrong priorities were used for the money spent.
The US government reacted to the financial crisis with both a stabilizing effort (popularly known as the "bailouts") to avert economic collapse, and a stimulus program. The stimulus program may have contributed slightly to stability, but it was the stabilization effort that prevented collapse. The goal of the stimulus program was to partially counter the sudden and large drop in consumer demand.
Economies always have times that are good and times that are bad. The government, by throwing money at problems, seems to believe it fixes them. This is not the case. Banks and businesses need to learn from their mistakes. Even if it means a business goes under, the government should not always intervene. Certainly, it will be economically strained for a period of time, but the economy will recover. People always have need and will have to do business with each other, so things will come back. I believe our economy is more likely to crash when the government spends excessive money. If we get to the point where countries will not accept our money because we owe them so much and our money has little value due to inflation, then our economy, and the world's economy, is in trouble.
Now, we have a zombie economy with zombie industries. If a restaurant chain is failing because the food is lousy and the service is poor, do you keep subsidizing it so it doesn't collapse? Of course not, you let it fail and allow a restaurant chain that people want to eat at to compete.
There is a theory that is referred to as survival of the fittest. It is necessary to have things go bad at times. In all honesty, the stimulus plan really did nothing to help the economy. All the funding that went into it went into greedy pockets that did nothing but provide unnecessary bonuses or plan for unnecessary programs. There could have been better things done with that money that would have helped the economy more.
America's stimulus plan primarily affected the American economy and did not prevent a worldwide collapse. To believe that our stimulus plan prevented a world wide economic collapse is arrogant and egotistical. Our stimulus plan barely had an effect within America and did NOT help the economies of several countries in Europe whose economies DID collapse, nor those of several countries in Africa who have suffered a recent collapse.
I believe there are strong enough banks in this country that they would have bailed out each other. We are talking about the world financial system. We need to remember we are not the world but only one country amongst many others.
I don't think the world's financial system would have collapsed without that stimulus package. I believe that there are major power players that would have prevented this. Things might have gotten to the near brink of complete disaster, but I really think things would have happened to prevent a meltdown of the global financial system. The people who are overseeing things--not just in the US--have to much at stake to allow a collapse.
The stimulus plan is a fabricated way to falsely prop up the economy and that will make it less stable in the future, not more stable. Would the economy have gotten bad? Possibly, but the free market is made to correct itself. Where one falls another takes its place, and it becomes survival of the fittest if you will. Those companies that are run well and can adapt will survive. That is what our economy is based upon.
The world's financial system would not have collapsed without the stimulus plan. In the Fall of 2008, there were only paper losses. Factories were not destroyed; houses didn't burn to the ground; and, companies that actually produce value did not suddenly lose their capacity to make things. What really happened was a lot of bets went bad because a lot of people on Wall Street -who have never produced a tangible object that a consumer could actually pick up and use - told other people to make these bets. In the cut and paste world where as people move up in a bank the actually know fewer and fewer details about the bank's products, this was inevitable. If the government had not stepped in the world would be better off. You would have seen the end of firms being led by the clueless, instead the government just weeded out a few bad apples. Had all the bad apples been left to rot, good honest firms would have taken their place.