Obama Initiatives Avoided Another Great Depression
The Stage Was Set
During the presidential campaign of 2008 the country was given startling news. Wall Street was in serious trouble with several large lending institutions and the stock market on the verge of collapse. It was reported that the financial system was in such grave condition that if an immediate bailout was not initiated the entire financial structure of the nation and the world economy were at risk.
Immediately President George W. Bush authorized the secretary of the treasury Henry Paulson to develop a plan to rescue the financial district.
After consulting with Federal Reserve Chairman Ben Bernanke, Secretary Paulson presented President Bush and congress with a one page proposal that essentially gave the treasury department carte blanch to allocate to Wall Street whatever amount the department felt was needed to save the financial system from implosion.
After some wrangling over the lack of regulation and supervision contained in the scant document a more detailed version called the Emergency Economic Stabilization Act was passed by congress which bore out of it the Troubled Asset Relief Program (TARP).
TARP, as it was later dubbed, provided taxpayer funds to struggling institutions to keep them solvent with the stipulation that they would pay back the "loan".
The bailout temporarily staved off an immediate financial catastrophe but there was still more work to be done.
A New Regime
When Barack Obama assumed the office of president in January of 2009 he faced a financial situation that rivaled that of conditions present before the stock market crash of 1929. Stocks prices were plummeting, banks were being depleted of cash holdings and the overall economy was grinding to a halt.
The economy needed to be stimulated or the nation faced what many experts feared would be another great depression.
The nation was in a panic.
After consulting with his economic advisers the newly elected president came up with a bold plan to jumpstart the economy and save it from impending doom.
President Obama's plan had two major objectives: 1) to save and create jobs 2) to provide temporary relief to those most impacted by the financial crisis with specific attention to social security recipients, unemployed workers and those who worked in the auto industry.
Although the results weren't immediately seen over time the economy began to show signs of recovery.
The auto industry picked up, housing began to slowly come back to life and retail spending increased which was a sure sign that consumers felt confident in the economy again.
By all accounts the stimulus had worked and the financial disaster had been avoided.
Give Credit Where Credit Is Due
Without question President Obama saved the nation and the world from certain doom. America's financial institutions were in economic freefall and no one knew where the bottom was.
Although many Americans did not agree with the measures taken no one can deny to some extent they worked.
The auto industry is back in a leadership position, the housing market is growing again, the stock market has recorded all-time high yields and the overall economy is moving forward again.
Surely all of these positive accomplishments are due in some part to President Obama's actions and for this he should receive due credit.
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