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Government Bailouts
Bailing out American capitalism in the present depression was far more expensive than most of the public will ever realize, especially since many of the costs were deliberately hidden. This Great Bailout was much larger than the Troubled Assets Relief Program (TARP), which went to the large banks, insurance and automobile companies. All but $50 billion of this has been paid back, but that was only one small part of the bailout. Governments concentrated on bailing out the banks and corporate elites rather than creating public works and jobs programs as Keynes would have recommended, and the costs in low wages and high unemployment for the working class and middle class was at least $5 trillion. Wall Street is profitable and the bankers are getting their bonuses, but ordinary workers and consumers at the lower and middle levels of the economy are suffering the worst conditions since the Great Depression of the 1930s. They also had to absorb most of the costs of the rampant speculation of the housing bubble and its collapse in 2008-09, which is conservatively...
These housing values will not return to the pre-bubble levels in a generation -- if ever -- but there has been no effective federal program for home mortgage relief as there was in the 1930s. So far the Federal Deposit Insurance Corporation has spent about $500 on collapse banks, which have not failed at this rate since the 1930s, and the Federal Reserve has also spent about $2 trillion to but bad mortgages and assets from the banks. In addition, the bailout of Fannie Mae and Freddie Mac, which also participated in the housing bubble, is likely to cost one trillion dollars. Following monetarist policies of keeping interest rates at zero for three years has costs retirees and small savers about $2 trillion in lost interest. Finally, about $300 billion of the almost one trillion in government stimulus spending is basically missing and unaccounted for. In short, the bailout of Wall Street and corporate America has turned out to be larger than the Gross National Project of the United States, although ordinary workers and consumers are…
2007 Economic Crisis on American Car market Effect of the 2008 global economic crisis on automotive industries Crisis in the United States Crisis in Canada Crisis in Russia Crisis in European markets Crisis in Asian markets Effects by other related crisis events In this paper, we will review the effects of 2008 global automotive crisis. Our main focus will be on the American car manufacturers and the negative impact they suffered due to the crisis. We will
At the core of the economic argument is Schumpeter's theory of creative destruction. In his seminal economic work, Capitalism, Socialism and Democracy, Schumpeter (1942) argued that innovation is the process by which economic growth occurs. At times, this means that old, established technologies and companies must be destroyed, but that the net effect will be beneficial. This sentiment runs counter to the theory that the economy would be better
Economic Crisis The recession of 2008-2009 and the subsequent government responses provides a good test for economic theories. There are no controlled experiments in economics, so we can only work with case studies in order to understand how economies work. A good starting point is to consider the issue through multiple different lenses, so that we can understand how the crisis occurred and what prescriptions might be best suited for response
fall 2007, the United States economy was rolling along in a healthy fashion having enjoyed 24 consecutive quarters of positive Gross Domestic Product growth. The Standard and Poors Index was over 1,500 and unemployment was below 5%. There was essentially no inflation. These were all good numbers and normally indicative of a health economy (Bloomberg Business Week). Roughly 12 months later everything had changed. Treasury Secretary Henry Paulson surprised everyone
Secret; The Power Rhonda Byrne's The Secret: The Power (2010) is truly an incredibly bad book, simplistic, repetitive and divorced from real history, politics or economics, yet it has sold 19 million copies. A cynic might say that the real secret to wealth is writing a bestselling book that millions will buy. Her 2006 book The Secret sold more over 19 million copies and was translated into 46 languages, and she
fiscal and monetary policy. On the most basic level, the primary difference between fiscal and monetary policy is that fiscal policy pertains to the actions of the federal government designed to influence the national economy through government spending and taxation while monetary policy refers to the actions of the central bank to govern the money supply. Tight or restrictive monetary and fiscal policy is used to curb inflation; a liberal