Obama's Bailout Plans Term Paper Example | Topics and Well Written Essays - 2000 words

Obama's Bailout Plans - Term Paper Example Treasury to help average Americans, $300 billion was used to bailout homeowners affected by the housing crisis in July, $200 billion for the release of Fannie Mae and Freddie Mac in September, and another $50 billion and $25 billion were used to save money market funds and car companies, respectively. Stimulus packages were also injected this year, as the Obama regime unleashed a mammoth $787 billion in February to combat unemployment and another $275 billion was allocated also in February for nine million homeowners to refinance their home loans in order to prevent threats of foreclosure. Another wave of economic rescue plans were bared in March, such as the $30 billion to again lend financial assistance to American Investment Group (AIG) hit by the banking crisis last year, $15 billion to help troubled small businesses, $1 trillion to try to save toxic assets from the balance sheets of financial institutions, and $ 22 billion to assist two automakers, General motors and Chrysler. The latest of the bailouts is the $1 trillion stimulus package as a result of the G-20 meeting in London in April. Given this uncertain amount of bailouts and stimulus packages, the office of the President, the Federal Reserve and the ... Millions of American jobs are at stake, and thousands of businesses- large or small- are also at risked of getting sideswiped by the financial turmoil. The fear of massive unemployment due to the unprecedented closure of big businesses like banks, car companies, and even small businesses galvanized the Obama administration into action by injecting stimulus packages that are aimed at saving the economy. Based on the U.S. government's forecast, joblessness will stand at 8.1 percent this year, but the figure is expected to drop to 7.9 percent in 2010 (Dickson). This means that hundreds of thousands, if not millions, of American workers are at risk of being pushed out of their jobs. Recession in the United States was said to have reached an alarming level, as businesses continue to be severely affected and unemployment rate continues to escalate. Now, the Federal Reserve is playing a major role in trying to solve the financial crisis that continues to threaten the U.S. dollar. However, will the Federal Reserve solve the economic crisis or will it only worsen the problem The Fed and the monetary system The Federal Reserve System, which was created in 1913 during the term of former U.S. President Woodrow Wilson by virtue of the Federal Reserve Act, is a semi-public monetary institution. This means that despite the word "federal," this institution is not 100-percent owned by the federal government. Since the creation of the Federal Reserve, economic crunch became unavoidable due to the inflationary nature of America's monetary system. In fact, a number of well-known critics of the Federal Reserve, which is beyond the control and supervision of the U.S.