$700 Billion Bailout

Article: http://online.wsj.com/article/SB122210246062663303.html


With the recent failings of Fannie May and Freddy Mac, the US economy has been in a downward spiral. Thus a new issue for the upcoming presidential election between John McCain and Barack Obama has risen. These two hopeful presidential elect’s are now going to have to weigh in on new economical politics and policies associated with the purposed $700 billion Treasury bailout. In all likelihood the stance that McCain and Obama take on this issue will help persuade or dissuade potential voters.

Both stances have its pros and cons as explained by Executive Washington Editor Jerry Seib in this video. http://online.wsj.com/video/the-prospects-of-paulson-bailout-package/541B13F0-FC83-4DCC-A4C2-6E3AB528311B.html

On opposite sides of many political issues, McCain and Obama actually agree in principle to some changes they both view as needed in the legislation. Both want more supervision of the Treasury, restrictions of executive pay, increased regulation of the bailout proceedings, and support for a struggling middle class America. McCain was quoted saying “My friends, the top executives are asking for $2.5 billion in bonuses after they ran the company into the ground.". In similar fashion Obama has said he would not agree to handing over a “blank check to Washington with no oversight and accountability when no oversight and accountability is what got us into this mess in the first place."

All similarities aside, McCain initially was against the government bailout of American Interational Group Inc. (AIG). He later changed his stance on the issue when a condition was made that insured taxpayers could recover money if the company bounces back. However, in a draft the Treasury presented over the weekend, a comparable condition was found absent. Making it all the more likely for McCain to oppose the bailout as in his decades in Congress he has seldomly supported government spending bills.

Obama, on the other hand, in the past has been more content with backing government spending bills and has not given any indication that he will not support the bailout.

So, as it stands now, it looks as if McCain and Obama will once again be on opposite sides of the fence.



Discussion Questions

1. Do you have trust in the US Government do what is best interest for the average American or do you think they will be lobbied to do what is best for the big companies?

2. How do you as a taxpayer feel about the purposed Treasury bailout? Do to you think it is necessary to have one, to ensure a rebound in the economy?

3. In the upcoming presidential election will McCain’s or Obama’s opinion on whether we should have a bailout or not persuade you to vote for one over the other?