The Big Picture –
Part 2 – What has the government response been?
Posted February 1, 2009
In the first part of this article we examined how we got ourselves into this economic mess and how our “leaders” and “experts” missed so many warning signs. In this second of 3 parts we will examine what the government response has been.
Our political leaders who once thought that we could spend and borrow our way to prosperity now seem to recognize that indeed something is very wrong. However they still do not view the “big picture” and have instead focused on individual elements of the problem without taking a holistic approach. Their reaction to the economic mess was to pass bailout bills worth over $700 billion, provide insolvent banks with taxpayer cash, guarantee bad debts, and purchase toxic assets. These responses have channeled most of the resources mentioned to our financial institutions in order to “increase their liquidity”.
Also published in the Market Oracle, December 2009