While we were suffering along without power, it was a week for the ages on Wall Street. By Wednesday, the Dow was down 800 points, and was poised to drop further. The Federal Reserve decided to keep interest rates unchanged. Financial heavyweights like Merril Lynch, Lehman Bros., Morgan Stanley, and Goldman Sachs were declaring bankruptcy or agreeing to be sold to the highest bidder. Gold prices were surging as investors dumped their stocks and invested in gold. Oil prices began climbing again. It was truly a grim situation.
Then on Thursday, word leaked out of a possible government plan to stop the bleeding. The government would step in and start buying up these bad mortgages that were killing the banks and financial firms. The plan is still being worked out by Congress, but it offered hope for a long term solution. Stocks rebounded and the Dow ended on Friday where it started the week.
Here is the problem: $30 billion to save Bear Stearns, $85 billion to save AIG, $500 billion to save Freddie Mac and Fannie Mae, and now as much as $1 trillion to buy up bad mortgage debt. We really don't know how much this bailout will cost.
Should government be in the business of saving the banks from their own bad decisions? It was the banks that made these bad loans in the first place. Will business owners continue to make poor decisions knowing that the government will always come to the rescue. Can we continue to keep spending money like this? What would Adam Smith say?
-or-
Was this action necessary to save the U.S. economy from collapsing? Doesn't the federal government have a responsibility to do what it can to keep us out of recession?
Read the articles and decide for yourself. Post your comments on this wild week.
77 comments:
In my opinion, the fed.s did what they thought was right, and if the effects of their actions were better than whatever would've happened if they hadn't stepped in, then good for them for protecting the economy to the best of their abilities. Although the government's plans will cause debt, I agree with President Bush when he said that this debt will eventually be paid off; I beleive that the debt now, as bad as it sounds, will actually help to restore our economic prestige, and, after all, the government has to do what they can to help us, it's their responsibility to "support the general welfare" of this country.
Although the move definitely helped the economy, up to a trillion dollar price tag for the government seems worrisome. There has already been a deficit for the past years of several hundred billion dollars; adding a trillion to that will increase it drastically. With the Iraq and Afghanistan wars still in progress, it doesn't seem right that taxpayers will be forced to pay extra to make up for some companies' bad decisions.
Hmm...It seems that this bad loan ordeal that the banks have started will eventually be cleaned up by the general public. I wonder if the rich will be able to get out of this one. I'd like to think no and that they will be paying what everyone else is paying but most likely it will not happen. And also, how are other countries responding to the U.S.'s economic situation now? They will probably be more cautious as to what they invest in. Plus with all the bad loans that banks have made, it will be even harder to get loans to help pay for college and other necessities. Whoever wins the presidential election is going to have a big mess on their plate.
On a brighter note, I would like to announce that with Ike and all its destruction, it also brings about some good. My sister was hit by a box of kittens and is now speech impaired. It is a lot more peaceful in the Chang household...
just kidding, I wouldn't wish that upon anybody...maybe. It depends.
I believe that it is indeed unfair for the citizens that DO pay their mortgages to have to pay possibly $2,000 to save the banks that brought this downfall upon themselves. However, I agree with Lindsey in saying that the government had to do what they could to save the economy, which could quite possibly be for the better in the long run. It is the governments responsibility to watch out, and step in when needed, for the economy and keep it running smoothly. No matter how unfair this situation may be to the more responsible mortgage payers of America, it had to be done to save the overall economy from collasping. Life isn't fair.
The government should not be bailing them out. These banks have made these bad decisions, and therefore should have to suffer the consequences. I agree with what people above had said it is not fair for tax payers to have too pay even more money in taxes. Kind of like the saying goes "You do the crime you pay the time." That should apply to everything and everyone, all people and businesses should be held responsible for their actions. If this does go through I feel that they will just continue to do what they did (are doing) and give loans to anyone and everyone.
Personally, I believe that this federal bailout is a step towards rebuilding the slowly-declining economy. Sure, this could possibly cost taxpayers a LOT. But, it's worth it if we can regain confidence in the market. Right now, foreign investors aren't taking the dollar seriously. I think that these bailouts would be a positive step forward for the economy.
We also have to think about the more indirect effects of letting these companies go bankrupt. My dad works for Eagle Energy, currently one of the few still-functioning former holdings of Lehman Brothers. If the government had let all of these companies to go bankrupt, all of the hundreds of thousands of employees associated with these companies would be unemployed. That wouldn't be good for the economy either.
It's a double edged sword. On one side, if we let these businesses collapse, it could lay ruin on our economy. On the other side, if the government always throws money at failing businesses, we, the people who don't make bad mortgages, have to keep paying for the neglegence of businesses and irresponsibility of some bank customers.
It's difficult to choose a position on this argument, but if i had to, I would say that we don't need to be saving these failing companies. Hopefully they will learn to not be neglegent and will fix the problem themselves without having us throw money at them.
The government have taken the right decision to step in and save the economy, or else the big companies must still be sinking in the debt, and all this must have resulted in a recession. Rather the government stepped in to save the stock market and prevent it from collapsing and kept up the belief of the people. At the same time we are failing to look at the problems that the government brought with it.i.e. the tax increase, when the general public are trying to cut down their own gas fuel usage the goverment is in turn taking away the peoples money by adding to our debts and increasing a burden on every people.
The fact is, banks provide service to billions of people, and if the U.S. government thought that these banks were worth saving, then the banks must be important for the economy. Yes, it is true that they made the bad decisions in giving out loans to those who were unable to pay them back, but the government did what is right in order to keep this economy from going down. Even if it added a trillion more to our debt, it's not like we weren't already majorly in debt. So them helping these banks out, was truly a good thing.
The situation is sort of like a kid whose parents jump to the rescue every time he makes a bad decision. We all know how well those kids turn out. The whole point of Adam Smith's "invisible hand" is that you let the market work out the kinks; you let inefficiencies be eliminated. These government buyouts are subsidized inefficiencies in the market. Companies who cannot survive in the current market environment need to adapt or they should be allowed to fail. Capitalism is based on the theory of survival of the fittest. Buyouts are short term solutions to long term problems.
I agree with both Lindsey and Alexa. The government had to step in from making the economy worse but it's unfair for tax payers. This solution is only temporary for a growing problem. Even though it will help in some way,the backlash of this is even greater. Will the govnerment take out even more taxes just to help pay off the debt? If this happens people will get less money on their paychecks and not able to pay off their mortages as much,hence forclosure.
But what really grinds my gears is the people who buy houses that are WAY out of their income range. Even if the bank gives them a mortgage loan,there's the adjustable rate mortgage,and all of a sudden you cant pay the payment that is due. I just find it common sense to buy a house you can realistically afford/buy. Buying a house that is way out of your income range and not being able to pay it back is the main factor for these banks and companies like AIG are going sour.
It appears to me that the government made the right decision to intervene rather than ignore the crisis and hope for the best. it is unnerving and upsetting to learn that experienced senators are worried and uneasy over these recent events. The cost given to the taxpayer, weighing in at AT LEAST $500 billion is also quite unnerving. Hopefully the financial sector will calm down in the near future.
DOES THE GOVERNMENT KNOW!!! I don't think they do. Although the bailout really helped the economy the nation is already in over its head in debt. The dollar is gradually meaning less and less. The president of Iran is constantly running his mouth. I have as much patriotism as the next guy but this debt business is starting to really worry me. I really like the fact that i live in the best nation in the world. I do not want that to change, and im not going to move to freakin china. Bottom line what ever is necessary to get our country's economy back on its feet I'm all for. Even if that mean tacking a trillion dollars onto our already 9 trillion ( AND GROWING) preexisting debt.
I am so in awe over this whole sitatuion. Sure, the government giving these business money to help them survive helped our economy, but like sarah said, it's like a set of kid's parents jumping out to coverup his/her mistakes. However, these are some of the most important companies today... AH i don't know... there are pros and cons both ways. I honestly don't think there is one correct answer. Although i do believe strongly on one point... President Bush believes the U.S. debt will be paid off? Hmm good luck with that... all 10 trillion of that.
I personally agree with what the government’s trying to do. However, I don’t feel that the government should repeatedly do this because first of all, it was the entrepreneurs fault for taking up the bad loans. Also, it becomes a routine for the entrepreneurs because they feel that the government will be there for them if something goes wrong again, so they wont be afraid to take a risk. Adam Smith would have said that the government should back off from the problem, and that the economy would correct itself. He would point out that it was the entrepreneur’s fault for the whole thing, and that the entrepreneur should correct it.
I don't think the government should be giving money for free to all this companies. Just because they can make money magically appear out of nowhere doesn't mean they can give it to anyone they want for free. What I think the government should do is give all this companies loans, so they can hopefully keep working until the economy fixes itself. Another way they could help the economy is by helping people that are losing their home, that would still work and help some of the companies. If the government is going to give money like that to companies, I think it would do more effect if they money give it to common people that can't pay their loans.
Bailing out the corperate businesses will helpe the economy because its keeping them out of bankrupcy. If big businesses are out of bankrupcy it probably means they're selling like they normally do. When they're selling, they're paying taxes from the profit that they make just like every other business in America(small or corperate).
As a business owners son (Pepperonis), I think helping corperate business as well as small business will hurt our wallets, but might very well help our plunging economy.
Mr. Pye!
http://ngm.nationalgeographic.com/wallpaper/img/2008/07/july08-05-1280.jpg
(: Just cause I thought you should know.
<3
Kelly Zeller
Hi new Pye people!
While the move will help the economy, the United States' debt continues to accumulate. However, I must disagree with the government's actions.
The banks' downfall was brought about by their own carelessness and taxpayers have to salvage them. Now, this interference has an effect on society in general as well. If people constantly believe that they'll poor decisions will be saved by the government, they will not be as careful in making decisions.
I believe that the government should bail them out, but punish them in a different way, in order to discourage them from winding up in the same situation again.
First off, the government is doing a noble thing in stepping in to help these banks that are suffering, but it is kind of sad thing to see that the US economy has fallen this low that it has come to these type of decisions. I personally do not have a problem with the fact that the government is assisting these banks, but it scares me a little because these are supposed to be some of our more stronger and steadier corperations. But for the sake of our economy, i believe the government needs to step in and take action for there could be alot of consequences if all these banks go down hill.
In the past, there has been a deficit for the past years of several hundred billion dollars. By adding a trillion to that just increases it drastically. Also, I think that it is unfair to those that pay their mortgages to have to pay about $2,000 to save the banks that has nothing to do with the citizens in the first place. To end this off, life isn't fair.
-Tracy Kwong
I really think the government should stay out of it and just let the chips fall where they may. It's not right for them to decide what companies survive and what companies don't. Lately, While this a big deal, I think the federal government has no place in this issue. If banks made bad loans they should have to take the hit, not us. Maybe it will teach them a lesson. It's better to make an example of their actions rather than fix it for them.
Like Stephen said, the situation of our economy IS a double edged sword; while bailing out the banks that are now billions in debt will add even more to what we Americans are already in, i think it is a good thing to rebuild our economy in that sence. And even though we tax payers should not have to feel the mistakes they have made in our pocket books, we should not leave them hanging on a cliff to let them learn from it because in reality we are only hurting ourselfs.. I think the people who make decisions on how to spend the money of their banks are smart enough to change things up in the way they went wrong so it will not happen again.
-Bianca Tankersley
I think that the government should do everything in their power to save our economy. Yes, the banks did make bad decisions but at the same time, the government is behind the banks. Although it will bring our company furter into debt I think that is better then having another Great Depression. I agree with Lindsey when she says the goverment has a responsibility to "support the general welfare" the government said it, so they should stick by the words we have lived by for years. America will pull through, we always do.
i believe that its not the governments job to save banks after making a mistake. Even though it will help the economy, i still dont think that the government should just waste money on something other than what is drastically needed. With the countrys debt skyrocketing as it is, money should be saved for a greater cause.
It seems as though the government is between a rock and a hard place. If they come to the rescue, it will cost taxpayers up to $1 trillion, but if it does not, the banks will fail and an economic crisis, or even depression, would occur. Though it is not the fault of the government, it is their duty to keep these companies from collapsing, or they will have a much larger problem on their hands. Also, if they can come to some sort of long-term cure for this epidemic of bad economy, it would be far better for the government and its citizens.
The government really appears to be in a pickle, as the bailout will have benefits and consequences regardless of what they decide to do...
I agree with the president, however, when he said that the move was essential. With the market dropping over 800 points, the move was necessary just to keep the market level and prevent a further decline. I thought it was interesting how the government picked and chose, so to speak, which companies to save. Poor Lehman Brothers...
On the other hand, the price tag for this bailout is just way too steep. We are talking about at least double, maybe even triple what Warren Buffet's net worth is! Can the government really afford this? I suppose only time will tell... However, I believe that the move was the right one for this point in time. There were just no other options available for the government to take.
I agree that this the tax is unnessisary, but how else do we expect the government to pay for everything. I dont think it is unpresedented to get taxed for things that might not immediatly affect us, but without taxes we would survive as a government. Peace Love and Gap!
I think the government officials did what they needed to do. I mean, if they had just let those huge companies die, it would have caused a lot of damage to the economy. I agree with Lindsey in that the government was supporting the general welfare and doing what they were supposed to be doing.
Yes the government should be in the business of bailing out the banks bad decisions because if they don't who else will ... yes the business owners are always gonna do what they think is best no matter what... and no we cannot continue to spend money like this but who is really gonna tell them to stop spending this kind of money they think its the only way out and i think adam smith would be quite appalled by the whole situation.
I spent the last evening, crowded around the dining room table with my brother and mother discussing the problems with the bailout. My mother is in the opinion that the end of the world is coming and it does not matter what Bush does we are all going to die. My brothers approach is much less dire. He does however, think that the trickle down effect that the bailout is supposed to engender for the american people will not be as successful as the president wishes. furthermore, it his belief that this project is doomed from the beginning. Because the people responsible for advising the president and lawmakers are...the root of the problems. to have desperate financial annalists advice about the problems of the financial sector seems a little inefficient at best. . i can only nod my head and agree
i think what the government did, was in the situation, the best choice they had. If our ecomomy crashes because of the bankruptcy it would be much harder for us as citizen to deal with it rather than paying off a debt. Yes its going to hurt no matter what happens but theres nothign we can do to aviod that and we dont want to have another great depression or stagnant economy like Japan had for 20 some years.
Adam Smith was a firm believer keeping the government out of buisness and let the people and thier "interests" guide the economy. HoweverI do believe that the government should intervene in this case or America will plunge into a darkness worse than the Great Despression. This would be a good oppotunity to learn from out mistakes and climb out of the hole we dug ourself in.
Well first off we already know that Adam Smith would definitely not agree with this, he hated the fact that the government always stuck their nose where it didn't belong. Like Adam Smith, I believe that the government should not have stepped in the way they did. Not only is our country in dept from the past and already paying high taxes, but because of the extra trillion or so the government has put on us the people of America will be forced to pay more money for some bad decisions that some banks made. We have so much going on in our country that it doesn't seem fair that the people have to pay more.
Whatever happened to laissez faire? Adam Smith would have definitely disagreed to government intervention. What would happen if the government intervenes? We would be more in debt, tax payers will have holes in their pockets, the value of our money to drop, and the economy could right now be shambles. But what if the government does intervene? Right now, the economy wouldn't be in the ditches. But, the government's "stepping in" can only give the economy a temporary effect. I say, let the invisible hand take care of things.
Seems to me that our economy is going down the drain. Yes the move has helped the economy, but another trillion to our debt is going to hurt it in the long run. Should the people pay for other peoples mistakes, eventually we will have to. Government should regulate our economy, but i honestly believe this buyout is a short term fix but something needs to be done for the long term fix or America wont be that great anymore.
The federal government is doing everything it can do to stop our economy from failing. Our economy is a very fragile thing. If one company fails, it is like a chain reaction. If congress doesn't pass this bailout,, our country could well be entering another Great Dispression. If that happens, we may never be able to turn around
I think that the decisions made by these companies have led them to the situation they are in now.They decided that as long as money came in,they did not have to worry about what conflicts might arise in the future.I don't see how the government can save them by just giving them more money.This will only reinforce these companies' erronous beliefs.
Whether or not the government bailout was the wrong or right decision, the American people would still have to pay in one way or another. If all these banks collapsed there would be serious repercussions on u.s. citizens. At least with the bailout plan the economy will be a little more stable while we're paying to get it back to normal.
The choice of the government to bail out these billion dollar industries seems unfair. Very unfair to the millions of tax dollars that will probably rise, and inevitably a huge spike in the nations already suffocating debt. This decision seems wrong in the sense that the American public had little or no say in wether or not we should pay out a super risky bailout.
I do believe that the government definalty has the responsibilty to keep our economy from collapsing. Overall in the long run it could be a good reminder of how easily our whole economy can be put in jepordy, and that even the US can be subject to the same problems as any others.
the bailout has helped but has also added another trillion to our debt. Its like a circle of money that never ends but rather than flow freely there is something that is keeping it from doing so. like mikey said its definitely going to hurt us in the long run.
It seems nice that government are throwing money into the economy to help out those companies, preventing us from getting into any type of depression. While on the other hand, we ARE the people who's going to pay for that government debt. I'm just hoping that government know what they are doing, and our economy can go back up again.
It's funny how when things satrt to look bad everything is an emergency when really the only times there are truly emergencies is when you are not prepared. The United States needs a wake up call and not just by the realization of a crisis. A crisis like this doesn't just happen in an instant it occurs over time.
The governement should not have to step in and pay for others wrong choices. These banks and corporations made bad decisions and they should suffer for it. Adam Smith would not want the government stepping in. Thats not there job. In the end it will be the tax payers paying up not the government so i dont want to give my money away so save a idiot.
Spending a trillion dollars on the companies bad loans is horrible and its not really fair for the smaller companies that did go bankrupt, since they weren't deemed important enough. Yet, although it is not fair it is still necessary move to maintain our economy. If they allowed these huge companies such as AIG to go under, then the economy would be so chaotic and everyone would be going crazy. People who have invested in their stock would lose all their money. So I think they what needed to be done.
The economy will balance out sometime. Every time the government does something like this it just tips the scales against our favor. For now that is. Maybe if the government just let the economy in it's present state sort this out the effects, immediate and long-term, would be worse than adding to our debt. I can't even imagine the foresight it would take to figure this all out. Until you can just take it one day at a time.
i think that it was necessary for the gov. to help out the banks from collapsing, otherwise the economy would of collapsed
The bailout plan is essentially a flawed respone because it divests attention away from the heart ofthe porblem, the proper redress to the problem is to overhaul and fix the regulatory policies that allowed commerical banks and investment banks to initially merge, without this amending then we as a nation may just be asting money.
With all the bailouts thaqt have happened,a total of 7.2 trillion,i can safely say this will totally suck when people will have to start paying off those bailouts through their taxes. and i am not looking forward to this. but i understand that sometimes the government does have to intervene in certain situtations but they could have made the bailout a little bit cheaper.
It sucks that a lot of companies are in this situation, but we have to remember that it was their poor decision making that got them here. It isn't fair for them to rely on the government to bail them out. The US doesn't have enough money to help every company that's going under. And most of the time, the companies asking for help are in danger because they're simply not in demand anymore. Ahem, Big 3. We have to stop spending money to keep business that no one wants or supports alive.
Oh, and Adam Smith would kick us all in the shins for this.
The Fed did what they thought would help the economy but in reality, it didn't help much. The companyies made bad decisions and should've known better than reaching out to the government as a last resort. The major companies need to helped out, but the government shouldn't be the ones to step in. Many believe that the government stepping in is a crutch for big businesses and they will become dependent on the government to save them.
I trust that the the intervention of the government is a safe step to take in order to aid in saving the economy. If major corporations in America continue failing and declaring bankruptcy, our country's economy will continue to weaken. With the help of the government, the stock market can, ultimately, be saved.
Personally i think, that the Federal Government should not just stand by and let theses banks go into bankruptcy. If the Fed stayed out of it, then what would happen to all of our money? Although this may push us further into dept, they cannot just stand by and watch our country sink into a depression.
We are a country built on debt, that pays it's mortgages with their credit cards. This new debt isn't anything new. Personally, I think it needed to be done, and unfortunately sometimes you are only choosing between the lesser of two evils. Siiiiigh.
lol at Bush's attempt. What the country needs isn't more dept to pay, but for the consumers to spend. By cutting off prices and taxes, people in the economy will spend more. The more money used isnt really going to solve anything because government's increase spending does not afect the public as a whole as much then for the consumers and citizens of the United States to spend more to get the economy going.
People make stupid choices. You are aware of your finacial situation before you go borrwing money. If you can not afford the payments on things like a mortgage do not go out and get one. duh!...be a little wiser. So cnow that the bank has lended out money to all these people and the people are not paying it back they want someone to bail them out.
They should give out this loan because it won't solve any problems. All it will do is add to our debt we are in. People need to start borrowing and spending while the banks are needing to lend out money in order for people to spend. Just give them money won't solve the crisis. It will just make the situation worse. Who knows. Maybe be next year, banks could be in this situation again and need higher loans. So its not a smart idea for them to be doing this unless it is the last resort.
this is one of the challenging postitions that one has to make. considering our economic status it is almost as if essential to save thes these careless little neglegent bussiness because if we don't, as they fall they are going to pull a majority of our economy down with them. at the same time, considering the debt we are already in from the progressing war in two countries, its drastic step to make loans of this much amount to save these business. all we can do is hope for the best and that this economic crisis will factor out for the best of our future economy.
I think that in times like these, the nation needs the help of the government. Because the government is steppig in to try to fix the problem it shows that they want to bring things back to normal. The situation our nation is in at the moment is so bad that we need the governments assistance and i really think at first it may be difficult but in the long run it should work out for the better.
I do not think it is the governments responsibilty to bailout the major companies so they dont go into recession but i feel that if they didnt, it would hurt many many more than just those banks and their employees. though we will be more in debt i feel it is the right thing to do for the sake of OUR economy
Although the bailout was hastily processed and was in a sense, unfair to save certain companies, it was ultimately needed. If the companies were allowed to fail, thousands of jobs would be lost and we might be in a worse situation with just as much debt. But then again, who knows?
i think the bailout will definitely help out our economy and help out with the spending to get us back on track. I feel although it is a lot of money if it does what it needs then i think we break even. Everyone wants the economy to do better but it will cost us and i feel thats the only way anything will get better!
Well now that so many months have passed since this article, and so many lives have been changing regarding the issues it's talking about, I think its safe to say that this was a huge problem from the get-go. Now that we are in a recession and are hoping that soon-to-be President Obama will make sure it doesn't get worse than it already is. Its kind of sad how there were so many plans to fix this but- in the end everything just went down hill anyway.
^Ashley Abraham (sorry i keep forgetting :/)
even though the actions taken helped the economy, adding another trillion onto the debt seems like it was a big price to pay. It also puts a lot of pressure on tax payers
Bailey McMath
I'm so torn on this subject. On one hand, the government kind of needs to help these banks out because their failure affects not only just them, but other people who probably don't have as much money as Wall Street. On the other hand, if we keep babying banks and helping them out of whatever problems they get themselves into, they'll never learn to not be stupid. It's kind of a double-edged sword. Either way, it sucks. Plus, the amount of money this will cost the government will push us deeper into debt. Also, looking on this from a hindsight bias, it obviously didn't work. Lame.
Why should the Americans have to bail out these banks that are making our economy fail in the first place? The government isn't paying them, it is the American's that are funding the stupidity of the CEO's of these banks. There is no way to trust that if we give them the money that they can turn it around. Everyone knows there is no such thing as a sure thing in the economy, so why possibly waste billions of dollars on something that will just disapoint us later in the future!?
i think we need to think about the cause of this situation. if it really was all the bad loans piling up then we must look to those who loaned that money out when they didnt have enough to cover it. banks wanted more money, more income, so they decided to take out more loans, causing more mortgages, causing more debt. and now, we have spent all this money absorbing all the bad decisions of businessmen in trouble. I say, when a sole proprietorship overextends its wings and spends more than it can make back, it goes under, no help, no bailout, it disappears and the idiot dreamer has to live with it; it should be the same situation for these guys. They messed up and now they must pay, bankruptcy, debts, debtors prison the whole enchilada. and should more people lose their jobs because of it, so be it. Like Adam Smith said, each nation should focus on specialization, so if they fail there, then try something else that you wont screw up.
The debt is growing daily...President Obama has made several announcements basically saying that we shouldn't be too worried about the debt increasing so rapidly each year, but the trillion dollar price tag has increased greatly over the last few months. The tax payers will be affected greatly by these decisions.
The Feds took a step in the right direction.Problem is, they went a little too far.Now, the banks won't give out all that money they just got and everyone else besides the banks are still suffering as if the bailout never happened.
I find it a little disturbing that we're spending this much money. With recent numbers bypassinf a trillion, I;m beginning to wonder what future years are going to show for the economy. Having that much debt can't possibly be healthy for a country's economy.
I find it a little disturbing that we're spending this much money. With recent numbers bypassinf a trillion, I;m beginning to wonder what future years are going to show for the economy. Having that much debt can't possibly be healthy for a country's economy.
The situation is sort of like a kid whose parents jump to the rescue every time he makes a bad decision. We all know how well those kids turn out. The whole point of Adam Smith's "invisible hand" is that you let the market work out the kinks; you let inefficiencies be eliminated. These government buyouts are subsidized inefficiencies in the market. Companies who cannot survive in the current market environment need to adapt or they should be allowed to fail. Capitalism is based on the theory of survival of the fittest. Buyouts are short term solutions to long term problems.
In my opinion, the bailout situation is getting rather out of hand. At the point of time of this article it wasn't quite as ridiculous as it is now, months after it's original publishing, but still quite bad. As we have seen, the proposed bailouts have not stimulated the economy in the way that it were intended and like Sayrah said, the current debt that we have, and are only adding to, cannot possibly be healthy for the future of America's economy.
I believe that it is indeed unfair for the citizens that DO pay their mortgages to have to pay possibly $2,000 to save the banks that brought this downfall upon themselves. However, I agree with Lindsey in saying that the government had to do what they could to save the economy, which could quite possibly be for the better in the long run. It is the governments responsibility to watch out, and step in when needed, for the economy and keep it running smoothly. No matter how unfair this situation may be to the more responsible mortgage payers of America, it had to be done to save the overall economy from collasping. Life isn't fair.
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