September 24

September 24 - Introduction to American Government POLS...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Introduction to American Government September 24, 2008 POLS 1105H The University of Georgia Prof. Anthony Madonna [email protected]
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Administrative www.fantasycongress.com Pi Sigma Alpha (the political science honors society) will have a meet and greet on Thurs, Oct 9 at 5:00 pm in Journalism 504. See me about withdrawing…
Background image of page 2
2008 Senate DELAWARE (SurveyUSA): US Senator Joe Biden (D) - 64%, political consultant Christine O'Donnell (R) - 32%. MAINE (SurveyUSA): US Senator Susan Collins (R) - 55%, Congressman Tom Allen (D) - 39%. MASSACHUSETTS (Rasmussen): US Senator John Kerry (D) - 65%, businessman Jeff Beatty (R) - 30%. NORTH CAROLINA (Rasmussen): State Senator Kay Hagan (D) - 48%, US Senator Elizabeth Dole (R) - 45%. OREGON (SurveyUSA): House Speaker Jeff Merkley (D) - 44%, US Senator Gordon Smith (R) - 42%.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The Bailout Financial firms like Fannie Mae, Freddy Mac, Lehman Brothers and AIG were making risky investments. Specifically, they giving mortgages to individuals/groups that could not pay them. Investor confidence in these firms waivered, stock prices plummeted, putting them “at risk.” Normally, the federal government would not intervene and the groups would seek “private market” solutions.
Background image of page 4
The Bailout At an aggregate level, this leaves companies with a shortage of funds, resulting in layoffs, bankruptcies, more foreclosures, etc… The solution is this 700 billion dollar federal “bailout” of firms. What are the pro’s and cons of this? There were no private market solutions to be found (or minimal). The government fears the collapse of these firms will continue to drain investor confidence (and money) from the market.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The Bailout - Positives The Paulson plan calls for minimal oversight from Congress and the Courts – which decreasing transaction costs and allows swift government intervention. Stocks jumped as the bailout plan was proposed. A quick reaction by the federal government to this crisis may help avert problems stemming from investor confidence.
Background image of page 6
The Bailout - Negatives Limited oversight – what if Paulson screws up? What does this do to the “free” market? Rewards firms for being risky. Do taxpayers benefit? Preserves executive “golden parachutes” – is this a bad thing? Wall Street and Washington inbreeding hurts government confidence. Increases the debt ceiling by 1 trillion dollars (nearly 10 percent). 8 % of the budget already goes to debt interest.
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The Bailout Newt Gingrich: “Congress was designed by the founding fathers to move slowly, precisely to avoid the sudden panic of a one-week solution that becomes a 20-year mess.” Washington Post-ABC News poll on the bailout -- 44% approve, 42% disapprove. Approval is under 50 percent among Republicans (49%), independents (46%) and Democrats (42%).
Background image of page 8
The Bailout Obama declines to put off the debate. Shortly after McCain’s announcement, Congressional Democrats announce they have a tentative deal with Paulson on the bailout. Why did they do this? Stocks jump back up. McCain “suspends his campaign” and heads back to
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/08/2011 for the course POLS 1105H taught by Professor Schatzinger during the Fall '07 term at UGA.

Page1 / 45

September 24 - Introduction to American Government POLS...

This preview shows document pages 1 - 10. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online