I think there are other alternatives to a bailout but

This preview shows page 1 - 2 out of 2 pages.

burden on the taxpayers, which I don’t believe is fundamentally right. I think there are other alternatives to a bailout, but governments are always afraid that an economic crisis or disaster may occur, so they quickly resort to the bailout as the quick solution to prevent it. - Chamley: You bring up some very good points Smith. My main concern with bailout plans is actually with the country’s that get the bailout plans. Bailout plans in the form of loans for countries such as Greece have a high chance of failing due to the country’s fundamental fiscal problems. There is a high government indebtedness that will result from the bailouts, which will lead to high risk. - Me: I see, those are very interesting points both of you bring up. I actually do have a question for you though Smith. - Smith: Shoot. - Me: Well………I was wondering, if you don’t see bailout plans as the best option to help out a banking crisis or help solve an economic crisis, what are some alternatives that you believe would work? - Smith: DID YOU NOT READ MY ARTICLE?!?!?!?!? (actually, I realized that I didn’t do enough research to answer this question when I thought about it, so I’m going to have to go back and do some more research – Henry)
Image of page 1

Subscribe to view the full document.

- Me: Anyway……why do you think many governments quickly see a bailout plan as the best solution to solve an economic crisis? - Smith: Well, in places like the European Union and the United States for example, the government’s main fear is that a single failure in any country/state can lead to dramatic economic impacts for the rest of the union. The governments want to avoid reaching this dilemma, so they see a bailout package as the fastest solution to the problem, even though it is not the best solution.
Image of page 2
You've reached the end of this preview.
  • Fall '07
  • BLAND
  • Subprime mortgage crisis, Financial crisis of 2007–2010, economic crisis, Bailout

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern