Did the government bail outs actually work Term Paper

Did the government bail outs actually work - Term composition ExampleThough counter to his conservative ideology, Bush relented and worked with Congress to pass tarpaulin, the Troubled Asset computer backup Program, a move applauded by then presidential candidate Barack Obama. TARP and the auto bailout were and remain moot topics. These were big gambles that, with all the associated drawbacks, paid big dividends. The bailouts saved a major American industry, the world from the broad Depression, the sequel and millions of people from living in Bushvilles. TARP, otherwise known as the bank bailout, was hurriedly implemented in 2008 as the world appeared on the threshold of a catastrophic fiscal meltdown. To stabilize financial markets, Congress authorized the exchequer Department to spend $700 billion, a move that caused widespread public phone call against the program. Most economists, however, understood that the move played a central role in rescuing the global economy. The Tre asury didnt use the entire amount though. It spent $470 billion on hundreds of banks, the auto industry and try to help prevent home foreclosures. Treasury calculated that the total lifetime cost for taxpayers to be $17 billion in losses from the investments in the auto industry and auto finance companies plus a $46 billion loss from mortgage modification programs. By any measure, TARPs last(a) tally will be far less than expected amid the crisis. But the program remains a big loser politically. (Credit, 2010). According to a Treasury Department official Timothy Massad, Read Mthe federal government successfully stopped the 2008 financial crisis by acting with overwhelming force and speed. The actions we took to stabilize the crisis worked. We actually did arrest the panic, said Massad. In addition, the financial regulatory reforms implemented the past three years comport afforded economic policymakers enhanced tools to scrutinize systemic risk and better manage future crises. T he U.S. governments rapid and robust actions are in contrast with how European Union countries handled their banking crisis. Weve seen Europe struggle with its problems for ii years. They creatent been able to act as forcefully with their problems. (Mowbray, 2011) To gain a little perspective, TARP and other government actions taken due to the financial crisis will cost taxpayers less than the savings and lend debacle during the 1980s, as a percentage of GDP (gross domestic product). Following the initial payout, President Obama go on the attempt to revive the financial system by implementing a scheme to help banks raise one-on-one money so that they can pay the government back. The Obama administration forced the 19 biggest banks to submit to a stress test to give potential investors confidence that those banks were solvent and reporting accurate financial records. Consequently, banks have been able to raise enough private capital that today banks totaling only about 8 percen t of bank holding companies by assets still have TARP money, down from 75 percent at the dawn of the crisis. (Mowbray, 2011) Another element of the Obama administrations reaction to the financial