The $700 billion bailout: Will it help or hurt the U.S. economy? Does anybody even care?

Miriam Williamson

As concerns about the economy grow, people’s opinions about the government’s response do too.

Ben Bernanke, chairman of the Federal Reserve, requested that Congress pass a $700 billion bailout plan for U.S. financial forms. He has urged the House of Representatives and Senate to make a decision this week.

Mark Kurt, assistant professor of economics at Elon University, explained that the government is trying to alleviate the pressures on the U.S. economy.

“The argument is that things could get really bad if we don’t do something about it,” he said. “It’s trying to keep us from going into recession.”

But many people are concerned that this behavior is neither appropriate for the situation, nor will it prevent problems further into the future.

“It kind of rewards this risky behavior,” Kurt said. “It needs to be put into regulation that this doesn’t happen again so big companies don’t make these risky actions.”

According to Kurt, the reason the bailout is needed is because of the financial firms’ decisions to take huge risks, even though it would affect the entire nation and the nation’s economy.

Kurt said that while he isn’t completely convinced of whether this is a good or bad move, he is leaning toward opposing it.

“My natural inclination is that free markets tend to work themselves out,” he said. “But then again, it could prevent a huge recession.”

Brandon Black, ARAMARK catering supervisor, is mostly concerned that the government is getting too involved in the affairs of private institutions.

“They don’t bail out regular citizens, and they shouldn’t,” Black said. “Neither should they bail out a private cooperation. Really the government doesn’t need to be involved in other people’s business.”

Gary Oakley, of Oakley Painting Paper Co., is unsure about the entire thing.

“When I first heard about it I said, ‘Why should our federal government bailout these companies?’” he said. “Our federal government wants to go in there and bail them out. They wouldn’t bail me out. But maybe they need to bail these people out to keep the country going.”

Sophomore Charlie Costa is concerned it will affect the citizens more than it should.

“I don’t think taking money from the taxpayers is the way to handle this,” he said.

Black also expressed concern about the effect this would have on Americans.

“It will only cause taxes to go up, or the monetary value of our dollar to go down,” he said. “Both of which are going to affect every American negatively.”

The $700 billion bailout plan is equivalent to $2,333 for every American.

This money will not come directly out of Americans’ pockets though, and Kurt said he does not think this amount will affect individuals at all.

“We won’t really notice it,” he said, “because it will prevent a recession.”

According to Kurt, the economy is in horrible shape. Unemployment is higher than it has been in several years, banks are holding their money and when banks do actually give loans to individuals or other banks, it is usually with a very high interest rate.

“This is the biggest thing to hit the market since the Great Depression,” Kurt said. “Things could get a lot worse. They’re saying the signs are really bad.”

Simon Cagle, senior, is a rare breed. He said he thinks the bailout is a move toward improving the problems with the economy.

“I think that it looks terrible in the short run, but eventually it will be worth it,” he said.

Perhaps the most pressing issue facing Elon though is the lack of awareness or concern among the general student population. Most students, with some exceptions, when asked about the $700 billion bailout, had never even heard about it.

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2 Comments on “The $700 billion bailout: Will it help or hurt the U.S. economy? Does anybody even care?”

  1. Julia Says:

    It’s very strange that a proposal that could end up costing us billions of dollars is so vague that it contains only 3 pages of documents.

    Very disappointing.

  2. Janna Says:

    Lots of good detail in your account, Miriam. GREAT! You need to specifically note that Kurt is at Elon University. I really like seeing how you hustled and got extra quotes that add more detail and bring more people from the community into the story. I’m hoping you will be adding some still photos and/or video!

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