Wall Street Bailout -- Part II
Wall Street Bailout
The government-orchestrated bailout of the banks has been hailed and yet also condemned due to its perceived efficacy or lack thereof. Jeffrey Fuhrer suggested a path that was a lot cheaper and perhaps a lot less encouraging and propagating of the bad habits of banks and government entities that led to the crisis. This alternative, of course, was the individual homeowner bailout. Indeed, bailing out homeowners directly would have cost a mere fraction of what it did indeed cost to bail out Citibank, Wells Fargo and the other banks. However, neither solution alone has a clear advantage over the other when looking at all relevant circumstances. While doing a homeowner bailout would have had its merits, doing just the bank or homeowner bailouts individually probably would not have been as effective as doing them both in concert.
Analysis
This report will start with a compare and contrast of what the two plans called for. The Fuhrer bailout plan to bail out the homeowners was fairly basic. Rather than give the $700 billion in loans to the banks, it was suggested by Fuhrer that money be given directly to homeowners but on a much smaller overall scale. Instead of spending the majority of a trillion dollars, it was suggested that only twenty-five to fifty billion was necessary to get the job done with a lot of that keeping people in their homes and a lot of the rest being distributed in the form of short-term loans that could then be paid back at some future date. Barack Obama championed a similar although much smaller program that helped some families but left others in a crisis. Further, many of those that got assistance did not receive...
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