Something New

I learned more about government bail-outs and how they can affect the American tax payer, and the economy.

Basically a government bail out is when a huge business, usually a lending institution, begins to fail and the government gives them massive amounts of money in exchange for a portion of the company. So in easier words it is the government buying huge numbers of stocks.

The obvious opinion is that this will raise tax prices, and it will. The projected plan uses about 700 billion government dollars that tax payers are going to need to pay. This ends up being some wher in the neighborhood of $2,300 for every american citizen. However, one must note that not every American pays income taxes, such as those who are too young to work. Thus bringing a bigger burden to those who do work and pay income taxes.

The second viewpoint is based on someone looking at the economy. If these lending giants were just jeft to go bankrupt, they probably would. But, if they were, more and more house values would drop and thus harming the lending industry more. If the lenders were suffering they would be less likely to give loans out, making it harder for people to buy a home, purchase a car, or even go to college. More important than it only making it hard to to get a loan, the market would fall more than it already has.

Both of these opinions depend on a long chain of reactions. These actions would most likely occur and both of them are probably true. The question is. whats worse: more taxes or a depression?