Government Bailouts Essay Example | Topics and Well Written Essays - 750 words

politics Bailouts - Essay ExampleIf the governing does not deputize and does not win financial assistance to the financially unstable large corporations, unemployment and other related problems would further aggravate an economy. Already, the economy of United States of America is facing very severe and harsh waves of financial crisis, which showed their presence in the year of 2007 and they continued till the remainder of 2009. History of bailouts The finance history has sufficient record about the events of political relation bailouts. In the year of 1979, Chrysler had befogged $ 1.1 billion. At that time, it was feared that this could negatively hit the consummate US automotive industry. In order to avoid the sequent impacts of this loss of Chrysler, the Feds had no option except to intervene and save the corporation. Instantly, in the year of 1980, the Chrysler Loan sanction Act was discussed, approved and passed. In this Act, Chrysler was given a loan of $1.5 billion b y the federal government (Gup, 4). Furthermore, in the year of 1989, savings and loan institutions became financially crippled. The failure of these savings and loan institutions was considerably spread almost all companies working in this industry. At that time, then President George H.W. shrub and his Government were unavoidable to devise and determine a bailout plan to address and stop falling this entire industry. Consequently, The President Bush and Congress passed a bill and made it as the Financial Institutions Reforms, Recovery, and Enforcement Act in the year of 1989 (Rehm). But, this government bailout was only limited to save the savings and loan institutions. In the year of 2001, United States of America was attacked with approximately deadly terrorist attacks on many cities. In which, the terrorists used aeroplanes to carry out the attacks on the land of America. due to the use of aeroplanes, the entire airline industry became a subject of economic and financial cr isis. These financial crises became so severe that the Government had no other option except to play the role of saviour. As a result, the then President Bush discussed the issue with the Congress. And this discussion brought a bill and that bill was passed as the bank line Transportation Safety and Stabilization Act. This Act mentioned some fundamental steps necessary to rescue the entire airline industry. The Act released $5 billion compensation and an additional step of $10 billion in loan guarantees (Rehm, Barbara &Mandaro). The year of 2007 and 2008 were worst of all. The onslaught of financial crises was uncontrollable and heavily damaging the economy of America. In October 2008, Congress passed the Emergency Economic Stabilization Act. This Act authorised the Treasury Department to spend the amount of $700 billion for the purpose of handling and tackling the problem of financial crisis of 2008. Government bailouts are not a paying attention but a necessity on the part of g overnment. The government has no choice but to intervene and play the role of saviour. No government ever wants to use its own funds and money to provide financial assistance or extend a loan to a corporation under radiation diagram financial circumstances. Rather, the government ensures that the corporation must and should be financially well-equipped and financially strong enough to obtain its expenses and its other financial and non-financial obligations. But, due to a variety of economic and political factors some corporations become uneffective to continue doing business