Thursday, March 19, 2009

Bankruptcy America



By Po-cheng Huang

BearStern, Lehman, Trump Entertainment, Delphi, even 250 years old company like Waterford Wedgwood filed for bankruptcy protection in this economic turmoil. The U.S. government had injected trillions of dollars into the economy, bailing out financial giants like AIG and Citigroup with money from the tax payers and issuing government debt to foreign governments, individual investors, and the Federal Reserve. With the foreign governments now show reluctances to purchase more U.S. debts, the Federal Reserve announced that it will spend another trillion dollars on buying 350 billion dollar Treasury bill and the remaining for Mortgage back securities. Now it raises the question, does the Fed have unlimited amount of money? When will the U.S. be able to pull itself out of debt? Who’s going to be carrying those debts? Or will the United States of America also ended up declaring bankruptcy? These are question that policy makers got to think about before printing endless amount of money, raising tremendous amount of debt and leave that to the next generation to help the failing financial institutions to survive while moves and actions taken to help the failing companies directly contradict to the free market belief that American have believed since 300 years ago.

Reference
http://www.nytimes.com/2009/03/19/business/economy/19fed.html
http://usconservatives.about.com/b/2008/11/20/no-more-bailouts.htm
http://www.google.com/hostednews/ap/article/ALeqM5jcTB9MbkEV5rd9YvlN-Fd92Ov6UwD970MPB05

No comments:

Post a Comment