Tamika Rickman – Critique on “A New Method to Save Our Economy”

William Reitan explains how the economic times are different and more promising today than the economy in 2008. During the recession in 2008 the government bailed out banks by giving banks large sums of money to compensate for the loss of money giving out to homeowners. Today the banks are lending money more carefully and analyzing their balance sheets and working with their reserves and available capital more closely. I would agree that the government bailing out the banks was a good idea because it helped banks to recover from a great loss due to the price of homes falling and homeowners were not able to pay off their loans. Also the government also helped to increase the money supply in the economy; therefore preventing inflations or deflations and a further decline in the economy. The government also prevented millions of people from losing their homes and becoming homeless and jobless. However, this action severely hurt the government by further increasing their debt and then having to increase taxes for taxpayers to bail out the government. The government’s actions went against the belief of capitalism, whereas, the markets control supply and demand, not the government. This may allow the government to gain too much control, increasing their power over capitalism. Businesses and banks have to work together to stimulate the economy and not depend on the government to help bail them out in order to reach some type of financial stability, otherwise the government will further sink into a large debt and will depend on the citizens to pay their way out which will just prolong the recession. I must admit that some government assistance is needed to help solve the economy but some structure is needed to help stabilize the cause, such as, the money is given to the banks as a bail out but a repayment must be paid within a certain length of time to avoid raising taxes and prolonging the government’s debt. Handing out large sums of money in a crisis without some type of structure and having tax payers pay the price is not the answer because it is truly hurting the economy. I also disagree with the idea of helping of other countries to pay off their debts, especially when other countries have no interest in helping us. Our interest in other countries is one reason why we have such a large debt of our own. We spend so much time being involved in other countries issues that we neglect our own. So many companies move overseas which hurts our economy because we are losing businesses and jobs bank in the states. The government needs to focus on encouraging companies to remain in the states and increase the exports of materials and decreasing the amount of imports. Other countries have to find solutions on their own to extinguish their debts while we focus on becoming the super power once again.