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Essay / Research Paper Abstract
This is a 3 page paper that provides an overview of the 2008 bailout. It includes an overview of the mortgage crisis, prominent objections to the bailout, and alternative responses. Bibliography lists 4 sources.
Page Count:
3 pages (~225 words per page)
File: MH11_KWbailou.rtf
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Unformatted sample text from the term paper:
listed below. Citation styles constantly change, and these examples may not contain the most recent updates. Is the Treasurys $700 Billion Bailout the Solution
to the Credit Crisis? The Pros and Cons , 9/2010 --properly! In 2008, the United States government implemented the Emergency Economic
Stabilization Act of 2008, more commonly known as "the bailout". This was necessitated by a banking crisis in which unsound lending practices had led to widespread defaults on mortgages which
left banks with very little in the way of liquid assets. In the end, the government spent more than 700 billion taxpayer dollars to purchase these defaulted properties from banks,
with the plan that they would later sell them to recoup the expenditure. For many, this "solution" to the problem of the mortgage crisis was disingenuous, and actually repeated many
of the mistakes that had led the banking industry into its crisis state in the first place. To be more specific about how the "bailout" was proposed and
carried out, everything began with the practice of banks issuing subprime mortgage rates. What this meant was that everyone - bankers, realtors, and buyers alike - expected the value of
housing to continue to rise, and as a result, standards for credit and loans became quite lax; just about anyone could get a loan, and buyers routinely took out loans
for much greater amounts than they could actually afford (Todorova, 2009). The reason these practices were tolerated is that, if the expectation for increasing housing values had held true, the
buyers would have been able to sell their properties at a future date for a profit, paying off the banks; the banks, for their part, would be able to refinance
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