Too Big to Fail

Topics: Subprime mortgage crisis, United States, Economy of the United States Pages: 2 (538 words) Published: April 22, 2013
Federal bailout programs in today’s economy are a very controversial topic. There are many arguments regarding both the pros and cons. In the case of Bear Stearns, Freddie Mac, and Fannie Mae, the government funded a bailout program to avoid bankruptcy for these corporations. If these corporations were to file for bankruptcy and not receive the bailout program, thousands of people would have lost there jobs and sent the economy into complete chaos. The bailout programs allowed these corporations to stay in business and avoid a collapse of modern day society. However, the burden of paying for these bailout programs falls heavily on the shoulders of the taxpayers. Many people believe that they shouldn’t have to pay higher taxes to fund corporations when they didn’t even want those corporations to be bailed out. Both arguments are very relevant and each has a strong point with a large following.

As for my opinion, I believe that the government acted with positive intentions and did what was absolutely necessary to maintain prosperity in America. I do understand the other viewpoint on the bailout, stating that taxpayers shouldn’t be responsible for corporations that failed because it wasn’t the taxpayer’s fault that they failed to begin with. However, the name of the movie couldn’t be more correct. “To Big to Fail” is 100% right. Freddie Mac, Fannie Mae, and Bear Stearns are tremendous corporations that supply an invaluable product to the market. I believe that an increase in taxes is a small price to pay considering how bad things could have potentially been. There’s no telling how bad the effects of these corporations going bankrupt could have been. I believe that the effects would be so harsh that it would affect foreign countries economies as well as ours. Like we stated in class, if another country is “feeling the pinch”, it was most likely caused from something that started in the United States.

The United States also funded the bailout of the American auto...
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