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Was the US government's $700 billion bailout ultimately good for the taxpayer?

The Emergency Economic Stabilization Act of 2008 enabled the US Government to bail out failing financial institutions. The bailout was deemed necessary to increase liquidity in frozen market, where a fear to lend would have crippled the economy.

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Experts and Influencers

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Agree
Experts In Politics


George W. Bush    United States President 2001-2009
Agree
I believe companies that make bad decisions should be allowed to go out of business. Under normal circumstances, I would have followed this course. But these are not normal circumstances. The market is not functioning properly. There's been a widespread loss of confidence. And major sectors of America's financial system are at risk of shutting down. The government's top economic experts warn that without immediate action by Congress, America could slip into a financial panic...
24 Sep 2008    Source


Experts In Economics


Ben Bernanke    U.S. Federal Reserve Chairman 2006-
Agree
Government assistance should be given with the greatest of reluctance and only when the stability of the financial system, and, consequently, the health of the broader economy, is at risk. In the cases of Fannie Mae and Freddie Mac, however, capital raises of sufficient size appeared infeasible and the size and government-sponsored status of the two companies precluded a merger with or acquisition by another company.
23 Sep 2008    Source

Sub-Arguments Of This Expert:
Did the Fed bailout Bear Stearns to benefit the taxpayer?
   Agree

Warren Buffett    Billionaire Investor
Agree
When the Federal government buys the mortgages, they’re not spending it, they’re investing it. Now, they’re investing it in distress type assets but they’re buying them at distress prices if they buy them at market. It’s the kind of stuff I love to do. I just don’t have 700 billion. [laughter] Maybe we could go in it together. You know, with your money and my brains, I mean, there’s no telling how far we’d go.
01 Oct 2008    Source


Disagree
Experts In Politics


The Economist    Politics and Business Magazine
Mostly Disagree
In our view, the pair [Fannie Mae and Freddie Mac] should have been nationalised back in July, and the new scheme should have had a clearer plan to shrink or break up Fannie and Freddie, so that they never again hold the taxpayer hostage (though not right now, because of the ailing housing market).
11 Sep 2008    Source


Experts In Economics


Alan Greenspan    U.S. Federal Reserve Chairman 1987-2006
Disagree
They should have wiped out the shareholders, nationalized the institutions with legislation that they are to be reconstituted -- with necessary taxpayer support to make them financially viable -- as five or 10 individual privately held units, and auctioned off.
14 Aug 2008    Source

Sub-Arguments Of This Expert:
Did the Fed bailout Bear Stearns to benefit the taxpayer?
   Disagree

Experts In Investing


Jim Jubak    Investing Columnist
Disagree
If we don't nail down these details [of the bailout plan], we risk: (1) creating this mess all over again; (2) giving Wall Street executives a free pass on any criminal acts they may have or might commit; and (3) putting the same Wall Street companies that got us into this mess in charge of the cleanup.
25 Sep 2008    Source



Comments

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0 Points      blacktrance      10 Feb 2011      Stance on Question: Disagree
If the companies made bad investments, they deserved to fail.


0 Points      Benja      20 Oct 2008      Editorial Comment
We may need to reword this question or add another. The problem is that the Economist and Alan Greenspan supported the bailout, but only reluctantly, due to the fact they think the taxpayer didn't get a good a deal as they could have had the government acted earlier.