Each day seems to bring our economy into an all new level of bad. How long until the Dow hits triple digits? Why is Jim Kramer appearing on television and pleading with tears in his eyes for everybody to sell?
Our economy is facing conditions rarely seen in recent history. As our government seeks to fix some of the problems, many are left wondering how we got here, and who is to blame?
Use the following websites to help in your investigation and consider each of the discussion questions. Be sure to check out all of the websites and make sure you understand the history of the economic crisis before answering the discussion questions.
Discussion Questions:
- Why should we worry about the stock market if we don't own stock?
- Should it be the responsibility of the government to "fix" the economy?
- Who do you believe is to blame for the current economic crisis?
How_Does the Stock Market Effect the Economy?
Welker's Wikinomics
Can't Grasp Credit Crisis?
Few evade blade for financial crisis
Financial_Crisis Explained
Who_Caused_The Economics Crisis?
34 comments:
Chuck Norris broke the economy!
1) People must worry about the stock market even if they don't earn stock because a lot of the money that large financial companies have come from stocks that they buy and sell. If the stock market is going down, all of these companies are going to loose money and probably go bankrupt which would have serious implications on the economy in general. The sudden absence of such large companies would in turn destroy smaller companies that rely on their loans and money that is given largely through the purchase of stock.
2) Many economists believe that it is the governments fault that all these failures are occurring and that the mortgage crisis is at the current stage. Regardless of whether or not it is indeed the government's fault, it does need to take control and help out the country. By providing money to stabilize the economy they are attempting to fix the problem the plagues wall street. The governments main purpose is to regulate and control and while normally we prefer it to be disassociated with our economy it is time that they took an active, if temporary, role in shaping and fixing our economy.
3) I believe the main part of the blame should be placed on homeowners who purchased real estate that they could never afford to pay off. By acting irresponsibly they have hurt not only mortgage companies but also those financial institutions that lend money to and support the companies. The government is not really to be blamed because the capitalistic society that we have requires that the government does not play a role in our economy so we cannot place any blame on the government for basically doing what we wanted it to do.
1) We should worry about the economy because the stock market effects the United states as a whole. Peoples pensions will be greatly effected by the stock market. A significant part of the funds of the pension are invested in the stock market. If the stock market goes down the value of the pension will go down.
2)The government should be responsible for fixing the economy. The government should have been monitoring the economy closely for illegal practices in the stock market. The government should be doing a better job at protecting the economy.
3)I believe that people who took out large loans which they couldn't pay off are responsible for the broken economy. This hurt banks and real estate and now has made it tough to take out a loan. People should only take out loans that they could pay off.
1. We should worry about the stock market even if we dont own stock because the wealthy people who do own stock care. The reason we should care about the rich people is because if they are reluctant to spend extra money that reduces consumer spending resulting in a decrease in the economy.
2. It should not be the responsibility of the government to "fix" the economy because we should try as hard as we can to be as much of a pure capitalistic society as we can even though it isnt possible to be pure capitalist. If the government gets involved we get closer and closer to a socialist society which is exactly the opposite of what we want. The bailout clearly didnt work because just recently the CEO's of AIG were spotted going ot a Spa in california spending a few thousand on a luxury instead of running their business.
3. I believe we are to blame for the crisis that faces us today. We should blame the people who asked for loans and knew they couldnt afford it. We should blame the people who didnt do an efficient background check on peoples credit. But we should try to not live outside our means otherwise we plunge ourselves into the downwards spiral that is occurring now.
1. We should worry about the stock market even if we don't own stock because it affects the economy greatly. The stock market basically is an indication of how everything is going, if the stocks are the down the economy is struggling and if the stocks are up the economy is doing well. Many big companies rely on the stock market and if stock falls the company goes with it. When stock falls this affects the average person because this will lead to possible struggle for them and less consumer spending. It could also lead to decreased jobs, income, and opportunity.
2. It should not be the job of the government to "fix" the economy. The government is in place to strictly regulate the economy and keep it steady. The SEC and Mr. Bernanke can do all that they like to try to "fix" the economy but in the end there really is nothing they can do. Rates can't just keep getting cut and every time they do it it's only a quick fix and then the stocks turn in the wrong direction. Even if they bailout every company we are still in tremendous debt and spending more out of the government's pocket is only going to make things worse.
3. I believe that the people are largely at fault along with the government as well. Irresponsibly taking out loans and mortgages along with companies continuing to give them out is a major cause. Since we were in such high times very unqualified people were able to take loans and credit was made available to almost every single person. Now companies realize their mistakes way too late and can't make up for the money owed, and are now going bankrupt. The Bush administration has run us into a multi-trillion dollar debt with the spending on war in various other areas of the government. What we owe back to China is because of our people but the government let this happen so I think the people can not solely be blamed. We are a republic, not a democracy therefore our government is supposed to know better than us and they let it happen anyway.
1. We should all worry about the stock market in some way as it has far reaching effects throughout our society. In this day and age everything is interconnected and the stock market is no different. If you work and have a pension plan than most likely your retirement money is invested in the stock market. This creates a massive problem for people who are nearing retirement age and have lost large sums of money in this turmoil.
2. I believe that it is the responsibility of government to help to fix the economy. What partly got us into this mess was the "hands off" approach of the legislative and executive branches so it does not make sense for the federal government to continue this approach. If the government allows the economy to fall even further than many more people will be allowed to feel the pain of this crisis.
3. It seems as though it was a combination of the deregulation attitude of government, poor choices of people, and the misleading nature of Wall Street which precipitated this economic downturn. Bills such as the one sponsored by Senator Phil Gramm of Texas helped to push this new era of deregulation and to remove some of the safeguards that were put in place after the Great Depression. Senators, Congresswomen, and Congressmen also became too close with institutions such as Fannie Mae and Freddie Mac. Members of Congress have received $4.8 million from Fannie and Freddie so this obviously skews their judgment in favor of the two mortgage guarantors. Fannie and Freddie also hired lobbyists to convince members of Congress to sponsor and pass bills in favor of them. Many people have also made bad financial decisions which has led to the current crisis we find ourselves in now. Some homeowners took out risky mortgages that were deceivingly good looking but in reality these people could not keep up with their payments. This leads to the deceiving nature of lenders and banks which made it seem as though everyone could afford a house that was clearly beyond their means. Now millions of homes are in foreclosure and Congress has had to pass a rescue plan to buy up these bad mortgages and hopefully recover most of the money eventually. All in all there is no one cause for the turmoil but rather there is a whole host of reasons why we now face tough times.
Steve B
1) People need to worry about the stock market even if they do not own stock because peoples pensions will be effected. Many pensions invest there assest in stocks, and with the stock market dropping significantly, many peoples pensions will lose large amounts of money.
2)The govnerment should not be responsible to fix this economic problem, but they have no choice. The only way this problem can be solved is through government intervention. A large amount of money must be injected into the market to help kick start the economy.
3) Homeowners who took out larger loan then they could afford should be blamed for this problem. Many people took out larger loans then they could afford, now with there morgage payments rising they are not able to make the payment on there loan. Not only should the homeowners be blamed but the banks as well. The banks must give the homeowners realistic loans and not push them to take a larger loan that they cannot afford.
1. Yes, we should worry about the stock market even if we don’t own stock because it can affect pension funds and investments in the long run. The drop in the stock market also makes it more difficult for us to get a loan at most banks.
2. I believe it should be the responsibility of the government to “fix” the economy because if they do not do so the whole crisis could become significantly worse and may lead to severe economic downturns. They need to restore the confidence of their citizens before everyone begins to panic.
3. Everyone who purchased goods that they could not afford and/or took out large loans that they knew were too extreme are to blame for our economic crisis. Combined, they all put the large companies into too great of a debt. Their irresponsible actions are now coming back to hurt them. However, it is also the large companies’ faults because they allowed too much buying on credit to occur, and for people with poor credit scores to receive loans. Some could argue that it was also the government’s fault, because their loose regulation in the economy allowed for this whole cycle to begin.
1) We should be worried about the stock market even if we don’t own stock because even though the stock market is a not a direct representation of the condition of the economy, it does serve as a largely reliable indication of our country’s economic standing. The plummeting prices of stocks in today’s market reflect the poor state of the economy and have therefore resulted in claims about a recession. When stocks aren’t doing well, people become reluctant to invest money and so consumer spending decreases. In addition, firms are less welling to issue shares of lower priced stock and so are unable to raise finance through the stock market, which halts their expansion. Lastly, declining stock prices will lead to reduced values of pension funds and therefore less money for people in the future.
2) I do not believe that it is the responsibility of the government to “fix” the economy. The government exists only to regulate the economy and should not be adopting any role that would give it too much power. The government can try to help the economy get “back to health” with temporary appeasements such as rate cuts, but should be wary about getting overly involved with things such as bailouts. The government isn’t responsible for fixing the economy, and so should not incorporate itself into the economy with any sort of permanent role.
3) I believe that the blame for the current economic crisis can be placed upon the people and the government. When the government chose to repeal the financial protections that were put in place during the Great Depression, it took away regulation from the government and gave it to the companies, firms, and banks, who proved to make poor decisions with their newly granted freedom. Lenders and banks started giving out loans to people who would previously have been ineligible, and so these people were able to purchase homes that they really couldn’t afford. By the time these people realized this, their mortgages were too high and they were stuck with huge debts. Now the government is forced to pay these debts, which takes money out of their pocket and in turn the people’s pockets. In addition, the government made poor decisions due to their overly involved relationships with Freddie Mac and Fannie Mae, who had contributed large sums of money to campaigns. The government allowed itself to be corrupted and did not act fairly in some cases as a result.
1. One should worry about the plummeting stock market even if they don’t own stock because its crisis is a general reflection of their nation’s own economy. Credit will be tighter, pension will go down, and companies will go under, damaging our economy as a whole, and loans will not be dealt out as easily.
2. A part of me believes that it is not the government’s responsibility to fix the economy, because in a “free market” a company must be free to prosper, as well as free to fail. If a company is not free to fail, it will not have as strong an incentive as it should – an incentive to perform more efficiently and put out a better product. I once heard someone say that we function within a system of “crybaby capitalism;” meaning, that when times are good, people call for hardcore free market, and when times are bad, those same people crawl crying for bailouts. That’s not right. If our government is willing to save these monstrous corporations from going under, than they should be much more willing to help out the little guy. The aid should be fairly set.
3. For something this huge, the blame cannot be pinned all on one commodity. It is the people’s fault for taking out loans they couldn’t afford, but is also the banks’ fault for sweet-talking them into getting those loans. Also, it is the fault of corporate greed. These bastards would take on irresponsible mortgages, not sweating the risk, knowing that those juicy premiums would cover their hides. Their relentless greed and carelessness caused them to implode, but no lesson is learned, for our government bailed them out. Then what? Those bastards at AIG go and spend $440,000 at an exclusive resort spa, immediately after receiving the $85 billion from the bailout. They are pigs, and I wish they had let them drown -- and by drown, I don’t just mean financially, I mean actually drowning, as in slowly and painfully suffocating underwater.
1- People with private pensions or investment trusts will be indirectly affected because pension funds invest a good amount of money in the stock market and if the stock market changes in any way, the amount of money available for people's pensions will vary in the same way.
2- It really should be the financial institutions responsibility to "fix" the economy, but since it is a far bigger problem than they can handle it is a good idea for the government to step up and be the hero of the economy.
3- I hate to sound like a broken record, but I believe it is the financial institutions that are to blame. If the financial institutions used better judgement in who they would give loans to they would not be in such a pickle. It is great thing that everyone can get a house and a morgage, but if the financial institutions know that the people they are giving morgages to cannot pay up the financial institutions have no right to complain.
1)Everyone must worry about the stock market because a weak economy and a weak stock market not only affects the stockholders, it affects the nation. A stock market crisis will have serious repercussions on every American citizen down the road if businesses and more banks start continue to go bankrupt. Every person should be concerned about the power of America and its stability if the economy is not stable.
2)While it would be great for the government to fix the economy that is virtually impossible to do. The responsibility should be an even balance between the American citizens and the government working together to fix this situation. To rely solely on the government is an unrealistic and potentially dangerous solution.
3)The blame should be mostly put on greed and irresponsible actions by American citizens. For example, people living in houses that they can not pay off mortgages for and people who took out loans that they could not pay. Sure, you could say that the government could have intervened but that is also a very tough situation for the government to monitor throughout the US and the American citizen should have took responsibility for their own actions. Careless and reckless actions by the people with the most money in our economy is another fault of American people.
1.There a number of reasons why the people who don’t own stock (us) should be concerned about the stock market. The number one reason that most analysts discuss is that, due to this extreme drop in the market it has caused many financial institutions (related to sub-prime mortgages in particular) to loss a ton of money which leads to those institutions being unable to lend out money to us to buy any assets. Another reason why we need to worry is because many people own a pension plan with their company (depending on their job). Pretty much, how a pension plan works is that the money taken out of your annual pay-check is combined with company profits, to create company capital. A companies capital is used to invest in stock which they hope to get a good ROI (return on investment). So if the economy goes down, the ROI will be less, therefore decreasing the amount of money any company will obtain, which will trickle down to having less money in a given pension plan.
2.Regardless of who is to blame for this crisis, the government needs to step in to help the economy. Whether they realize it or not, its true because in the long run it will hurt them just as much as it hurts us. The government needs to regulate what happens before one company dominates all and make our economy very corrupt. Another reason is that if people lose houses, the government is going to lose tax money from those home-owners and by the end of this crisis; everyone is going to be affected. If this problem gets any worse, the government won’t even be able to obtain a loan for such things as a war effort.
3.I believe the financial institutions are to blame for this problem. Even though some analysts think it’s the homeowner, the financial institutions could of easily enough just rejected people for receiving the loan. Since the mortgage companies’ decided to go ahead and use their money in a risky investment that they might not get back, they are now all deep in the hole. It’s like the companies tried to gamble in Vegas with all the their money, and failed miserably.
Stephen R
1. We should worry about the stock market even if we don't own stock because it affects the entire economy. If the stock market is suffering, our employment will see similar fate because companies will have to cut jobs or risk bankruptcy. With more people out of work, they have less money to pay for extra goods, further pushing the economy down. For those who do keep their jobs, they may have a pension, and its value will go down with the market, lessening the amount of money they can expect to receive if they retire during this time.
2. The government has to take some action to fix the economy. For one thing, a lot of blame can be put on them for letting, and even pushing, banks to make the risky loans that are now being defaulted on. Also, even though we would like pure capitalism, the government can not let people suffer as much as would happen in a society that utilizes that, and needs to take action in order to maintain a certain quality of life for as many of our citizens as possible. This is true even though the economy follows cycles, meaning that it will eventually pull out on its own, as it will probably be too long for the government not to step in.
3. The blame for the current economic crisis can be spread to many groups. The government turned a blind eye to what businesses were doing and did not heed warnings about the risky businesses. The banks should not have given out loans they knew probably would not be paid off, and should not have pushed people into taking those loans. Also, the people who took the loans are at fault as they should have some extent of what they should be able to afford, and should not have purchased homes that were at what seemed to be such a bargain.
1) People need to worry about the stock market even if they don't own stock because it has a great affect on the economy. The stock market affects large companies and if the large companies lose money, employees amy lose their job.
2)Even though many feel as if the Government was the cause of this economic crisis, they shouldnt be the only ones to fix it. They should be responsible for not letting it crash completely and help out to get our economy up and running again. It shouldn't be a permanent thing for them to be so involved, but just make sure we don't go into another great depression. At the moment, the government should take the responsibility to fix the economy.
3)I believe it is mostly mortage companies giving out mortages to those who can't really afford it. Many people think they can afford something super expensive but then they never pay off the mortage. Then things get bad because the companies are losing money. Also many people use their credit cards so much and dont pay it off. Another big thing would be how people were panicy over the recession and starting selling things and the economy went from not good to really bad.
1) People should worry about the stock market even if they don't own stock because it is so part of the United States economy today it is virtually unavoidable. The shift of the stock market indirectly determines pensions, money of the wealthy, and it also shifts how Americans view the economy. Also, businesses and industries are tied into the stock market as well, and would be affected by its rise and fall.
2)The question of the government being responsible of "fixing" the economy causes much controversy, because when the economy is fine, Americans feel as though the government should have as little to do as possible; they feel we should be absolute capitalist. During economic hardship, though, people feel as if the government should fix the economy, such as is the case now. It should not be the governments job to fix the economy on the basis that we claim to be a capitalist society, however this does not mean that it cannot take steps to help the economy become more stable, such as giving money.
3)Its almost undeniably the people who are to blame for the economic crisis in the world today. People who took out loans that they cannot or could not pay in essence 'broke' the economy. Also, it is partly the fault of the companies who give out these loans, which the people cannot pay, which causes the companies to go bankrupt. When this happens on a large scale, the economy is affected as much as it is today. Banks are also to blame for the crisis because they give people loans who cannot afford to pay it back, and the result of all the corporate greed is the stressed economy we have today.
1) we should worry about the stock market because we may have investments that we dont even know are backed by stock. take pensions for exemple, many people who work for big corporations get their pension in stock. if the stock market goes down the value of theoir pension goes down. The stock market also effects consumer spending. when people see that the stock market is not doing well, they dont buy as much in fear of a recession or possibly even a depression.
2) The Government should not be responsible for bailing out or fixing our economy because we live and have thrived on a cpatilist and free market economy since the birth of this nation. In a free market economy only the strong surrviveand if the government saves the weak and dying companies, it disrupts the entire system. look what happened after the government did eventualy bailout banks, the dow fell almost 4000 points this week. the worst week on wall street in history. I think that the market is telling us that we should not intervene but rather let the market take its course.
3) the Banks are responsible for this crisis. They gave out very risky loans that were very appealing but not many people could pay them beack. the banks expected this money back but many people could not afford to pay it back. on top of these too good to be true loans, the banks also took the customer money and made high risk investments that hopefully would bring prosperity to the banks. however these were high risks and did fail. when the banks lost the consumers money the value of the banks crashed and eventualy failed. with less banks and the value of most all banks declining most companies could not get loans to run their business. this was a huge dominoe chain of events which was caused by the failure of the banks.
1) People must worry about the stockmarket even if they don't own stock becuase if the stock market drops then all aspects of our economy suffer. Pensions will decrease in value while large companies go bankrupt forcing the tax payer to spend more money to pull them out of bankruptcy with more taxes.
2)It is the responsibiltiy of the governemnt to "fix" the economny because our country's governemnt runs on money. Without a stable economy our country will fall into ruin and anarchy, and so while normally the governemnt should not be involved in the stock market in this case it has to be for the sake of the nations people.
3)I believe that it is the banks that gave out loans to people to buy houses that they would not be able to afford in just a few years fault. The people that bought houses with money they were expecting to make were foolish, but it was the banks fault in the first place for even approving them to take out these huge loans.
1. A declining stock market affects everybody regardless of stock investments. In the United States, private pensions are affected by the overall value of stock on the stock market indirectly. This is due to the fact that most pensions are invested in the stock market with the goal of increasing their value. The retiring American will notice this the most since the funding for their life is based of these pensions. Not only as a retiring citizen will one be affected the most, but as consumers, our behavior will tend to differ in a prosperous economy rather than a declining one. The general consensus for plummeting companies is a negative one, where the consumer will tend to spend more with companies that are performing better. The poor performance of the housing market and the collapse of Fannie Mae and Freddie Mac is clear evidence of this. Loans are also harder to achieve with the failure of many banks such as Lehman Bros. and Merrill Lynch.
2. As a last resort and under irregular circumstances, the government should be allowed to "fix" the economy. The current state of the economy calls for the current government bailout that we see, but a bailout should be the farthest the government should go. More regulation should not be allowed. When numerous companies fail, the government has the responsibility to fix the economy. Not all institutions should require bailout, however though to fix the economy. Lehman Bros. was not bailed out over the other private banking institutions. Without the government acting, the economy of the country will drag for a long time before recovery. Something is wrong in the public if all the institutions in a certain industry start to all fail. One out of many institutions failing, however, does not warrant public/government responsibility.
3. Many people from average citizens to government officials and CEOs should share the blame of the economic crisis we are in. The many citizens who were not able to meet mortgage payment terms contributed greatly to crumbling finances of these financial institutions. CEOs, lobbyists for the failed company, and government officials can all be blamed primarily for misleading the public. Companies knew they were not doing well, however, they reported differently to the public. In fact, members of Congress facilitated this information to the public. Political commentator, Bill O'Reilly points out that people such as House Representative and Chairman of the House Finance Committee Barney Frank told the public that stocks in Fannie Mae would be doing well as he stated the company was performing well. However, this was the complete opposite at the time. People invested in Fannie Mae and lost a huge sum of money when it failed. Corruption, a reason for failing institutions, is part of the reason why CEOs and CFOs may share the blame. Money was not used primarily for the company, but reports of wasteful spending and luxurious but unnecessary spending was taking place prior to the failure of these companies.
1.We need to worry about the stock market even if we don't own stock since our pension funds are invested in them. A higher value of stock is favorable to better pensions as these two are directly correlated. Confidence among consumers falls with falling stocks as well. This can affect what companies we purchase products from. Also banks and business are invested in them and if it does poorly it ultimately means that every individual has to pay for it indirectly through tax. This also creates sense of insecurity for investors and less loans and credits.
2. No, I do not think it should be government’s responsibility to fix the economy. I truly believe the business should be responsible for it and at the end if government has to be responsible for the economy we(the tax payers) would have to pay for the bail out money for the banks and business.
3. Blame can be placed on the government for the emphasis they placed on a deregulation policy the past couple of years. This deregulation has lead to corrupt business practices being performed and allowed which has lead to the fall of these financial institutions. Money was not always used where it was said to be used, for example. The government should play more of an investigative role taking out this type of corruption in businesses. But I also blame the poor management by the banks managers and CEO and the lending policy without collaterals.
1. As people without any stock invested in the stock market, we should still worry about it’s current state because of the many effects it has to the entire public. Depending on the state of the stock market, the wealthy will either be hesitant or willing to put money in the economy, which, in time, will circulate to everyone. Under a media influence of negative views of the economy thanks to a failing stock market spenders will also be hesitant to put money into the economy thus crippling it further.
2. I think it should be the governments responsibility to fix the economy because their poor supervision let the economy spiral out of control. If the people could not be responsible for sustaining the economy then how are we suppose to repair it?
3. The housing situation and all who molded it to be the way it has become are to blame for this economic crisis. The government created tax cuts which inflated the mortgages of houses which forced home owners to give more money for their homes. In addition to the tax cuts, mortgage companies became discouraged to give money to the people who needed it to pay for homes. Basically, real estate caused the economic crisis.
1) People must worry about the stock market even if they do not personally own stocks because they are often, in some way, connected to the stock market. For example, if you work for a company and the company's stock drops significantly the company may go bankrupt or be sold, which can cost you your job. Also, many companies retirement funds are provided through stock investments. Therefore, if the stock market drops, or even worse crashes, you may lose a significant portion of your retirement funds.
2) Although the US has, for many decades, been based on a laissez faire government when it comes to the economy, it is time for the government to step up and try and prevent the economy from plummeting even more so than it has already. Had the government not provided the bail out thousands of loans would not have been backed and therefore millions of dollars could have just been lost.
3) I believe the banks should be blamed for this dramatic economic decline for providing loans to those who could not pay back the money
1) We should worry about the stock market because major companies rely on thier stocks being bought and sold. without this these companies would suffer greatly and in turn would not be able to meet peoples demands. Also many peopels pensions would loose a lot of money because they have large investments in stocks.
2)The government should be responsible for fixing the economy because they should be monitoring the econmoy to make sure things are handled fairly and to make sure there is no curruption by companies. The government had get the country out of the depression and they have to regulate the economy now like they did then.
3) I believe homeowners are to blame because people have been taking out loans that they could not afford. Also the companies that lent this money out are to blame because they shouldnt have given out this money if the people they were giving it to arent reliable enough to pay it back.
1.) Why shouldn't we worry about stocks? Since the citizens of the United States are intertwined financially, those who don't own stocks are somehow - and in a major sense - related to those who do own stocks. For example, since corporations such as AIG and Lehman Brothers relied on stocks as a way to utilize finances for their company's uses, it doesn't help if the stock market sees a fall in shares. If this does occur, then stocks are harder to buy, and as a result, the major banks don't get their money. What happens when those banks don't get their dough? Then we, the middle class, are screwed over. We don't want to be screwed over, so we should seriously give a damn about the stocks.
2.)The government should try to involve themselves in this financial crisis, not necessarily take full responsibility and try to "fix" it. Since the economy is, without a doubt, one of the lifelines of the country, if the government decides to leave the people alone and let them work it out on their own, then the bureaucrazy* aren't really fulfilling their responsibilities of being big brother. The government, I feel, should work to cope with the crisis, and the bailout plan doesn't seem like a solution either. It only looks like it was made to solve short-term problems while disregarding the issues in the long-run. Yet *another* bad decision of our nation.
3.) I think the stupidity of those who are the leaders of the failed big banks, living in lavish villas and graduating with degrees that don't reflect their business ability, are responsible for this. The government is also responsible, since it seems like its financially "pardoning" the corporations for their screwed decisions with this $700,000,000,000 plan. I need that money.
[Don't fail me for this post, please.]
1) When Dow Jones fell -18.15% last week, Bush bothered to appear to make a speech to soothe the citizens’ worries. Even my uncle, who was not involved directly to stock, showed his worried expression. From Mr. Bush’s and my uncle’s worried faces, I already could infer that stock can influence the economy greatly. It is probably because the stock is in the chain of economic flow, and so if stock drops, other economy will be affected badly. For example, although the house market was valued highly because many middle class people sought to buy it from loan (mortgage), the bank suddenly sought to foreclose their mortgage when the house values dropped. It caused Lehman Brothers out of business. And the government, in order to keep the banks from bankruptcy, decided to buy the companies. The Freddie Mac and Fannie Mae, which bought the “debt” from the banks, also are being shaken on the same flows. Furthermore, it would affect other countries’ economies badly. For example, in Korea, partly because disbelief in economic system caused much slower flow of USD, the KWR became valued much less. Also, the Europe, which possessed many loans rather than USD, is shaking greatly. Consequently, the drops of the stocks would cause the disaster of banking system, and international paralyze, which indicates virtually no companies would remain competent.
2) The government’s role is also important. According to the Republican point of view, the American economy is able to overcome this disastrous situation, and more regulation should not be allowed. From the Democratic point of view, the economic disaster began from middle class’s failure caused also by the last years’ governments, which encouraged spending rather than saving. Also, supports for those in Middle Class, like universal health care, might help them to build their budget again (and make them be able to pay the loans back). The increasingly interesting point is whether the possible repeal of Iraq militias would also encourage the businesses because much government budget went to the Iraq War. Joseph Stiglitz, a Nobel Prize winner, calculates the war’s cost as more than three trillion dollars. My point, at least right now, is leaning toward to democratic view.
3) All of those who were involved in, at least partly, were to blame. It would be people’s faults because they bought the house that would be unable to pay back; It would be government’s faults because it encouraged them to do so; it would be banks’ faults because they just gave the money toward them; it also would be Freddie Mac and Fannie Mae’s faults because they bought the loans and broadened the scale world-widely. However, I think it is mostly government’s fault because it is keeping the forces in Iraq War, which is extremely costly and unpopular both within and outside the country and because it only encouraged spending by loans, and not solved people’s fundamental problems.
1) We should worry about the stock market even if we don't own stock because it can affect the pensions we earn after we retire. Even if we don't personally own stock, a good amount of pension funds are invested in the stock market and the value of the funds will change directly with the condition of the stock market.
2) While the government should have some responsibility to "fix" the economy, I feel that the consumers should also share some of the responsibility. Of course its the government's job to organize and map out a strong economic plan for the nation to follow, but it's the consumers that need to save their money and make smarter decisions in the marketplace.
3) Since I feel that it is impossible to lay the blame for the economic crisis on one common group, I'd have to say that it was both the faults of Congress and greedy individuals. Congress motivates these individuals to purchase more goods by decreasing the tax rate and making it seem as if they can afford more than they are really able to. On the other hand, these individuals should be able to settle for what they can afford and not simply assume that they will eventually be able to pay it off.
1)We should worry about the stock market even if we don't own stocks because the company's that we buy from are still affected even though i am not a shareholder. For example, we are affected most by banks going bankrupt in the past month yet most of us are not share holders. If a bank that we are a part of goes bankrupt that we are paying loans off to we as an individual are in trouble because that bank no longer haas the money to loan us. And when I say loans the main thing that I am talking about is mortgages, and that is one of the main reasons the mortgage industry is doing so poorly right now. But anyways the basic reason we as individuals care about the stock market is because the stock market is a humongous part of the economy and it sort of symbolizes the economy because if the stock market is doing bad usually the economy is doing bad and vice versa.
2) I believe the government should be responsible for fixing our economy because honestly i think thats the only way its going to happen. People will always be greedy and take out loans that they really can't pay off just so they can have a huge house or a BMW or a Mercedes Benz. I mean the people have to do a little something because the Federal Reserve cant justr keep cutting rates. But I think the government is doing the right thing with this $700 billion bailout plan, and I believe if they did't come up with this plan we would go into a depression.
3) Banks and greedy investors are to blame for our current economic crisis. A perfect example to provwe this is the use of sub-prime mortgages. A sub-prime mortgage is a mortgage given to people with bad credit. Many banks gave these mortgages to people at a price that at the time was affordable. But really in time the the loan was not affordable for these greedy paople who wanted a bigger and nicer house than they could afford. So as rates went up people could no longer afford to pay off their mortgages and then the banks would go in debt bacause peopl weren't paying off their mortgages. Thus, big banks like Wamu, Lehman Brothers,Countrywide, and Indy mac, filed chapter 11 or went bankrupt and then got taken over by other large banks.
-Tyler Adwar
1) We should be worried about the stock market even if we don’t own stock because it’s interconnected to our economy. Companies with falling stock are often forced to downsize, causing loses in jobs. Pensions are often invested in the stock market and the funds are directly affected by the shape of market. If a company goes bankrupt, you could lose all of your retirement money.
2) It shouldn’t be the government’s responsibility to fix the economy because we’re a capitalist society. By allowing the government to buy out major banks, we’re stepping closer to a communist society. The idea of the bailout is to save banks who gave out risky loans and mad bad choices. In a free market, it is not the job of tax payers to fix the mistakes of other companies.
3) I believe that it’s the fault of Americans and banks for this crisis. The people are at fault for taking such large loans they couldn’t afford, and the banks are at fault for giving out loans so freely. If banks were more responsible and selective about giving out loans the housing market wouldn’t have collapsed.
1) We have to be concerned about the stocks because even though it is not the entirety of the county’s economy, it does show trends of how our economy is doing. With all of these crises, people are much more reluctant to spending their money and investing in stocks because they’re afraid of losing it all. And since no one wants to buy stocks, the businesses will not be getting a substantial part of their profit and will in turn reduce their productivity.
2) I think that the government definitely has a responsibility to help out a bit but it can’t help too much. It has to give minimal aid to people to put them back on their feet but it can’t just bail out the fools who put themselves into a big mess because it would be like rewarding stupidity and it would be unfair to tax the whole society when there are people who are not making dumb mistakes.
3) I think that this crisis boils down to stupid people and banks. The morons who decide to buy a house when they don’t have the money are destroying the economy. It is simple math to see that you have less than you need. Also, the dumb banks which allow these stupid people to make these transactions are as much to blame because they give out such ridiculous loans to people who are obviously not going to pay it back.
1.) We should worry about the stock market even if we don't own credit for a couple of reasons. For one, the stock market is an indicator of our country's economic situation. It means that the companies are not doing well. Also, people's pensions are reliant on the stock market.
2.) I think the government is responsible for fixing the economy because the government is partially to blame for this problem. The government helped cause this crisis because it promoted credit too much and printed too much money and by doing so put too much money with no backing into our economy.
3.) I think the government is to blame for allowing this to happen. The banks are also to blame for giving out loans so easily. Even though it was irresponsible for people to take out loans they could not afford, it should not have been an option for people like that in the first place.
1) We should worry about the stock market even if we don't own stock because the falling prices of shares will lead to less money being retained by those who purchased the stock at a higher price. The plummeting share values lowers consumer confidence in the market and leads to a lose of monetary value in people's retirement funds, 401k's, pensions. It's a psychological effect when people see that the DOW is so low that people will stop buying stock when the values are so low. It will also lead to the collapse of smaller companies because of the very low money that they retain from the market because of the collapse in stock values. Bigger companies could take advantage of these weaker smaller companies and buy them out which causes layoffs and increased job losses.
2) I am reluctant to say that it is the government's responsibility to "fix" the economy but if the $700 billion bailout legislation was not passed then the free market would not improve over time. The government should have increased oversight and regulation of financial markets in order to ensure that risky practices by banks and loaners does not go unchecked. The government must hold those CEOs and business leaders accountable who took advantage of their increased wealth from corporate tax loopholes and tax cuts and who took millions of dollars for their own material wants and selfish purchases.
3) Republicans and Democrats both let this crisis get out of hand and both the House and Senate did little to prevent this financial crisis from happening. In the past eight years under the Bush Administration, We've seen our national debt skyrocket to 10 trillion dollars, wages and pensions flat line, the wealthiest 5% have done incredibly well under the Bush tax cuts while the middle class has been hurt by numerous foreclosures, increased job losses and rising health insurance costs. The free market may be able to fix itself over time but it needs both parties to provide oversight and increased regulation, buy out the bad debt and loans that banks, financial institutions drove into handing out to consumers who were unaware of the enormous risks they were taking. It is important that we also realize that the American consumer is partly responsible in that they took up mortgages on houses that they couldn't afford over time and took up loans from banks that they couldn't pay back. The extremely low interest rates that were put into place by Greenspan and remained unchanged by Bernanke also helped create a false sense of security with homeowners that ended up costing them dearly. I also believe that Bernanke and Paulson did not sound the warning bell earlier. It's not like the financial crisis came out of nowhere. It was a slow buildup of bad financial practices by banks and corporate CEOs, little government oversight and regulation, the regular consumer's inability to correctly recognize what they could afford and what they couldn't afford. Blame can only get you so far. Hopefully the $700 billion bailout plan works effectively enough over time that the global financial markets stabilize and the recession eventually ends.
1. Even if we don't own stocks, we should worry about the stock market because in essence it is at the center of our economy. If stocks go down, companies can be run out of business and people can lose jobs. If the bigger companies are losing money or out of business this will cause a chain reaction, effecting smaller companies and average people down the line.
2. The government should not be responsible for correcting the economy. The U.S. is capitalist not socialist or communist. Government has no right to be involved in the economy nor should faultering companies be bailed out. The economy should correct itself.
3. I believe the blame should go to two problems. One is the massive debt the U.S. is owed which is causing problems all across the board along with foreign nations buying into more and more U.S. companies as one result. Second is all the homeowners who are unable to pay back loans taken out in ignorance. This means all the little banks which handed out the loans now can't pay back the bigger banks and the result is a huge debt in money. And because people can't be arrested for being in huge debt, nothing can be done to fix this problem.
1)We should worry about the stock market even if we don't own stock because the stock market affects the success of our economy. If the stock market is faltering, there is a panic among the general public, which causes uneasiness in oneself. If the stock market is not doing well, either are the businesses which must change their course of action to try to get the public to buy their product. If businesses are not doing well, this in turn affects the consumers in a negative fashion who will be uneasy about buying the products from these businesses in the first place.
2)In a perfect world, there would be no government. The United States would be able to run itself from pure capitalism without government intervention. However, this perfect world is not a reality. The United States needs the government to step in now after the corruption of businesses and the stupidity of the people have royally messed up the economy. If the government was to do nothing about the economy, we would forever have a disastrous economy due to greed. If the government is to act the way it should (without greed), the government may be able to fix the economy to the point where the Average Joe is no longer struggling to supply for his family.
3) Blame for the economy has to be placed on the banks, the consumers, and the mortgage companies. First off, the banks should not be giving incentive for the general public to go out and spend money when they know they will have difficulty paying it off. Next, consumers just should not be so dumb. Why are people trying to spend so much money that they don't have? It just doesn't make sense that people could be so careless with their money that they'd spend it to the point where they can't pay back their credit. The mortgage companies should also be at blame because they gave out the ridiculous mortgages for houses they knew the future homeowners could not afford. To make themselves look good and try to get more money off these people, they gave out mortgages that should never have even been considered. The culmination of all three equities broke the economy to a seemingly irreparable state at this point in time.
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