By the government choosing to bail these companies out, they made an excellent decision and it benefitted everybody. The money saved was phenomenal, how fast the economy recovered was astonishing, and the long term effect being that something to that extent won’t be happening anytime soon. The bank bailout taught big business a lesson, and taught the world as a whole a lesson. The banks were in deep trouble and by the government intervening and bailing them out, they got the economy back up on their feet. These industries were just ‘’too big to fail. ’ Opponents like to argue that the government wasted money foolishly on the bailout however, according to the Center for Automotive Research, a Detroit-based think tank ‘’it’s a heck of a lot better though than the $108 billion to $156 billion the government would have lost over three years if it hadn’t intervened. ’’ (Doc. 1) In making this statement the Center for Automotive Research proves that the government should’ve bailed out troubled industries because it saved them, as well as it saved the banks.
TARP, the Troubled Assets Relief Program was created in October of 2008 and its purpose was to help stabilize the economy. Although Robert J Samuelson is correct in stating that ‘’A Bloomberg poll last October asked how TARP had affected the economy. Forty-three percent of respondents said it weakened the economy; 21 percent said it made no difference; only 24 percent said it helped’’ (Doc. 2) he overlooks the fact that ‘’TARP was a part of the process by which fear was overcome. It wasn’t the only part, but it was an essential part.
The Essay on Government Economy Policies
Government Economy Policies USA has one of the most technologically advanced and largest economies in the world. Its GDP is near 12.373 trillion dollars. US economy is capitalistic and free-market oriented where the vast majority of microeconomic decisions are made by In this capitalistic, free market-oriented mixed economy, corporations and other corporations and other private firms. Business ...
Without TARP, we’d be worse off today. ’’ (Doc. 2) TARP was a program created fast and did what it was designed to do. In his discussion of TARP, Samuelson states ‘’When TARP’s remaining bank investments are closed, the Treasury expects an overall profit of $20 billion. ’’ (Doc. 2) Overall, the bank bailout was a success in gaining the economy back. The bank bailout saved money all around, for the government, for the people, and for the troubled industries. Opponents like to argue that ‘’taxpayers spent $700 billion and got nothing in return. ’ (Doc. 2) meaning that the bailout did nothing for the citizens however, Robert J Samuelson argues that ‘’When the entire financial system succumbs to panic; only the government is powerful enough to prevent a complete collapse. ’’ (Doc. 2).
The government needed to take immediate action so these banks did not fail, and their outcome was great. In fact, USA Today proves that at the end of the bailout, ‘’the government appears likely to recoup all but $13 billion of the $82 billion put into the bailout. ’’ (Doc. 1).
Without the governments bailing out these industries, we’d be in major debt and it would just be an economic depression for all. Without TARP, a program that helped a great deal with gaining money during the bailout ‘’the cost would have been many times higher; the practical problems would have been enormous’’ (Doc. 2).
In making this statement Samuelson proves that by the government intervening and bailing out banks, it saved an ample amount of money in the long run. Now that the bailout is done and over with, it has been proven that the chance of anything similar happening again are quite unlikely.
Robert J Samuelson’s claim that ‘’TARP will encourage more reckless risk-taking because big financial firms know they’ll be bailed out if their gambles backfire’’ (Doc. 2) rests upon the incorrect assumption that big business want to get into deep trouble. Companies aren’t going to just think they’ll be bailed out if something happens; companies strive for success and not failure. If the government hadn’t bailed out these industries we would be likely to have banks and big industries failing on us.
The Term Paper on Bank of Industry Nigeria
The Bank of Industry was created by the Federal Executive Council in January 2002 with the sole purpose of promoting and encouraging small and medium scale industries in Nigeria by providing long term financing to the industrial sector of the Nigerian economy. It was formed by the amalgamation of three already existing development financial institutions comprising: The Nigerian Bank of Commerce ...
As the economy has recovered, keep high hopes of nothing of the sort happening again. The bailout should be seen as a worse case scenario to big businesses, the government didn’t have to bail out these industries, but they knew it was the right thing to do and businesses today should never just rest upon the assumption that if their business fails the government will be there because with the amount of businesses today, its highly possible that the government isn’t going to be there. These companies shouldn’t dream of success, they need to earn it.
Consequently, the bank bailout was an overall complete success. It benefitted basically everyone at the time, and serves as an example of something to be aware of. The bank bailout stabilized the economy, saved a slew of money, and succeeded in preventing more bank failures. The United States government should have bailed out these troubled industries and the long term effects prove why. Without the bailout, the economy would’ve been a mess at the time, and still wouldn’t be right today.
