It all started quite sometime ago, when Alan Greenspan warned the American people that our economy was headed for a recession. Then not longer after that things started happening. Speculation over our current economic state became ramped. It all started with the crisis and bailout of two of the largest mortgaging companies in the United States: Fannie Mae and Freddie Mac. Then after that the balls really got rolling, people in California began withdrawing their money from struggling banks, Wachovia shut down its mortgage sector, and other firms like AIG began experiencing tremendous economic turmoil.
Therefore rather than raising or lowering the interest rate like the Federal Reserve has done in the past, the executive board has decided to take a more active approach to solving our economic problems. Today the Federal Reserve, in conjunction with President Bush and the Treasury Secretary, announced that it would be investing a large portion of the government's money into the American economy to provide a more stable atmosphere for business and to help alleviate the financial crisis. Ultimately, this means that taxpayers will be paying a little more in the future, but more importantly the power of our government is expanding once again. Personally, I find that government's role in our economy should be kept to a minimum because free markets work best when left alone. However, in this case I can see where the help of the government is needed, but we must ask ourselves: Will government regulation really help anything in the long run? Or is this solution just another band-aid for one gigantic wound?
I'm hoping the answers to those questions are yes and no respectively, but we'll see as we allow time to play out.
No comments:
Post a Comment