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.
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.
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.
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.
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.
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.
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.
Act on fear has never been a good thing. If the US government didn't bail out Wall street, the fat cat Chinese investor at the time would be ready to jump in. I am sure they would have bought themselves a hell of an investment, and we tax payer got a break. Win-win. Need anymore debate, Hillarians?
The IT experts scared the world of Y2K in 1999, like the wall Street scared us of a coming great depression in 2008 !
People learn from pain & they should have let the banks learn their painful lesson.
No one should be too big to Fail ! ! !
There is a chance... A chance that the bailout prevented full-blown depression. However, a full blown depression where you come out on the other side having learned your lesson is more desirable than pandering to a clearly corrupt system that benefits the extremely wealthy. I'd have rather lived poor in a fair world than slightly better off in a world that continues to propagate inequality.
The government gave banks $700 billion so they would create more home loans, refinancing options and help people stay in their homes. However, the government wasn't allowed to control the banks and what they did with the money so instead CEO's received record bonuses and mortgage's and refinancing became even harder to get.
And now the banks and hedge fund companies are buying/stealing the foreclosed homes that they created. This is criminal.
If you save someone today will save him again tomorrow and again and again and so on.
Too easy save, more difficult is manage the crisis.
Every bailout is expensive, and within 10 , 20 or 30 year create a crisis (due to the unusual growth helped by bailout). "We do what we can do."
Corruption! Its simply the spelling of the New World Order... And we all end up wearing burkas. Just look what is happening in America "the land of the brave and free" and I think Edward Snowden has something very important to say, Not at traitor, Not a hero just an Ordinary American in His own words.
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.
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.
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 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.
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.
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.