Resolved: Federal government bailouts of 3
MARKET BAILOUT WAS IN THE PUBLIC INTEREST
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- CORPORATE BAILOUTS ARE ESSENTIAL TO A GOOD ECONOMY
MARKET BAILOUT WAS IN THE PUBLIC INTEREST1. THE FINANCIAL BAILOUT WAS LESS THAN THE ECONOMIC DECLINE HURTING TAXPAYERS James Pethokoukis, Assistant managing Editor, September 22, 2008. “Bailout Prevents Great Depression 2.0,” US News.com, Accessed 12-13-2008, Paulson is asking for $700 billion. But that massive amount doesn't include previous government actions to cure the credit crisis (like propping up Fannie Mae and Freddie Mac), nor does it take into account money the government may get back from selling the bad assets it will be purchasing. So let's say those situations cancel each other out, and we are really talking about $700 billion. Now that money is being borrowed. So you take $700 billion borrowed for 30 years at prevailing interest rates, and you are talking about $2.5 trillion. But as Paulson said last week, "I am convinced that this bold approach will cost American families far less than the alternative: a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion."
MSNBC News, September 21, 2008. “Economists see financial bailout as necessary,” MSNBC.com, No one knows for sure, but Zandi said if the experience with cleaning up all the assets left over from the savings and loan mess is any guide, it should be less than the $700 billion that the administration is seeking. In the S&L crisis, the government was able to recoup about two-thirds of its initial costs when it sold the assets it had obtained from the failed S&Ls. "Obviously there is a big upfront cost to taxpayers," Zandi said, "but the ultimate cost may be measurably lower." 3. LETTING WALL STREET FAIL WOULD HAVE BEEN FAR WORSE FOR CONSUMERS Paul R. La Monica, CNNMoney.com editor at large, September 22, 2008. “Be ticked off - but get over it,” CNNMoney.com, Accessed 12-13-2008, But make no mistake. The alternative that many CNNMoney.com readers seem to be calling for - i.e. let all the banks and Wall Street crash and burn - is not viable. In fact, it's incredibly short-sighted. So once the blind rage subsides, people will hopefully take a long-hard look at what the government has proposed and come to the realization that doing nothing to rid the nation's banks of all the poisonous mortgage assets on their balance sheets would be far far worse. 4. WITHOUT A BAILOUT, THE AMERICAN PUBLIC WOULD HAVE BEEN WORSE OFF MSNBC News, September 21, 2008. “Bush seeking $700 billion for financial bailout,” MSNBC.com, Lawmakers digesting the eye-popping cost and searching for specifics voiced concerns that the proposal offers no help for struggling homeowners or safeguards for taxpayers’ money. The government must bail out the financial system “because if we don’t, it will have a tremendous impact on American consumers, homeowners, taxpayers and the rest,” House Speaker Nancy Pelosi, D-Calif., said in San Francisco. 5. ALTHOUGH A BITTER PILL, THE BAILOUT WAS ESSENTIAL TO PROTECT THE PUBLIC Thomas Hartley of Buffalo Business First, September 29, 2008 “Bailout deemed 'necessary in short run',” NEW MEXICO BUSINESS WEEKLY, Accessed 12-13-2008, A bailout of the ailing U.S. financial system -- bitter pill that it is -- ought to be passed by Congress and probably will be, a University at Buffalo professor said Monday. “It is necessary in the short run. Otherwise, markets will plunge, people will lose money in their retirement accounts, and the real economy may be affected because of the lack of credit,” said Cristian Tiu, UB assistant professor of financial and managerial economics. CORPORATE BAILOUTS ARE ESSENTIAL TO A GOOD ECONOMY1. FEDERALGOVERNMENT BAILOUTS ARE ESSENTIAL TO AVERT A MASSIVE ECONOMIC CRISIS Gary Wood, Staff Writer, November 29, 2008. “No Bailout Plan for We the People,” Nolan Chart, We know the sales pitch as it is being used effectively from every sector. Our nation is in an economic crisis. This is not only a uniquely American problem but a world-wide emergency. Without immediate action all will be lost, all will fail while dragging the people of our nation into the deepest depression we've likely ever seen. In times of such desperate challenges there is but one answer, our federal government. Relying on the federal government to bailout all the areas necessary to avert an ever-growing crisis simply is the only answer we have for there is no other source available to stave off this emergency.
David Vaughn, Staff Writer, November 7, 2008. “Financial Meltdown Worse to Come, More Bailouts Needed!,” THE MARKET ORACLE, Accessed 12-13-2008, Are you happy to see the government bailouts? I know I am. It's about time the government recognized the importance of industries that are suffering & need billions of dollars to sustain their business. Where were the government bailouts when so many other worthy industries in the past were dying and struggling for their very existence? Where were the government bailouts when the horse and buggy industry was fighting to keep up with the newly invented automobile? Where were the bailouts when the US textile industry all went east and west and every other direction but home? To my understanding, today, there is not one shirt manufactured from scratch in the US. 3. HISTORY IS ON THE SIDE OF BAILOUTS. ONLY THE FEDERAL GOVERNMENT CAN ACT Gary Wood, Staff Writer, November 29, 2008. “No Bailout Plan for We the People,” Nolan Chart, Adding to the fuel is a long list of federal government actions occurring over the 75 year period from 1933 to 2008. Over that period it has been our legislatures, executives, treasury secretaries, and federal reserve chairmen who've managed to intervene in what was once a capitalist republic that flourished. Each time we have faced a crisis over the past century it has been our federal government riding to the rescue and each time we have the same results, bigger federal government without long-term fulfillment of the promises made during emergencies. What we have today are states so weak they too feel they need to request bailouts. People so scared many are willing to continually turn to the government for support. Dependency so deeply entrenched it is hard for people to comprehend any other answer but this same government that's led us to where we are today. 4. HISTORY PROVES BAILOUTS ARE ESSENTIAL TO ALLOW CORPORATIONS TO SURVIVE SLUMPS Daniel Batson, Staff Writer, December 6, 2008. “Bailouts are a necessary evil, but the economy depends on them right now,” THE TENNESSEAN, Accessed 12-13-2008, The bailouts are one big credit card for American industry to use while the effects of the financial crisis and global changes in the markets are being ironed out; in which we are literally borrowing the money from ourselves based on the good credit of the United States. It is the equivalent of a line of credit that a farmer takes out at the beginning of the planting season, only to be re-paid once the crops come in. And, with proper oversight, it will serve as a buffer that will enable corporations to weather the current storm, and eventually thrive once the market revives itself — and if history is an indication, it will revive and thrive.
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