AR Factor Quote

In the latter part of 2008 the economy of the United States faced substantial obstacles as the banking industry was shocked by rapid changes in the global economic system. Confusion around lots of newly created financial instruments caused extreme movements in prices around the globe.

The effect was so devastating that a prestigious financial titan, Lehman Brothers, had to file for bankruptcy. A couple additional major banks avoided a similar end only by being scooped up by competitors at a small percentage of the price they would have commanded not long ago.

Many pundits predicted that the crisis was so bad that a depression similar to that of the beginning of the 20th century was not only possible but even likely. As a result the US congress felt compelled to do something and the legislature wasted no time and passed an economic bailout bill to help protect the economy from a massive slow down.

The bill has budgeted for two types of cash to be supplied; one was earmarked for the banks and related financial institutions and the second was for the greater economy. The purpose of the legislation was to accomplish two things; immediately decrease the current risks to the financial sector and also create much needed stimulus to the financial system to lessen the effect of a recession.

The legislation was quickly passed with subsequent presidents and congresses expanding the size of many of the stimulus packages initially started. The banks were able to benefit from programs including the Troubled Asset Relief Program that helped them to rid themselves of loan paper that had become a burden on their financial books.

Congress also affirmed their continuing support to bailing out the financial firms by developing policy closely with them and other affected countries around the world. Things such as tax policy and fiscal policy were modified to support the financial companies.

The other sectors of the domestic economy were also included in the federal stimulus grants plan. Vast amounts of cash were earmarked to encourage expansion in lots of industries such as technology, criminal justice, and energy.

Funding was also utilized to implement education programs to help anyone out of work because of the financial slowdown. Federal funding was dispensed around the United Sates’ economy by several paths including grant programs and subsidies.

Congress’s bid to stimulate the domestic economy to avert a crisis was a highly debated choice at the time and remains so now. Many thought the dangers to the economy were not as bad as many economists suggested while other detractors concurred with the potential risks but thought the proposed cure ineffective. Whatever opinion may ultimately prove accurate it will undoubtedly be a number of years and trillions spent before anybody knows which it is.

Get information on stimulus grants and other government grants opportunities