Week #3, Blog #1

At 10:50pm on 9/16/08 the top issue being discussed by Fox News is the $85 billion bailout of AIG by the federal government. This is an issue that is very important to the broader economy as a whole. AIG is an enormous investment banking company that controls mortgages to individual banks. If this company was to fail then it would send another single to the American people and the world that our economy was faltering. This $85 billion loan is perhaps a very small price to pay for the ramifications if AIG was to go belly-up. I think that the media is using this as a sort of scare tactic. They are showing that in light of Merill Lynch and Lemahn brothers shutting down their operations this week that our financial markets could not take another hit like this.

I think that this is a very good decision by the Federal Reserve to provide this loan. Without it, I think that we would continue to see a sharp decline in the stock market that is very close and resembles what was going on in 1929 when that bubble burst and lead to the Great Depression. Senator Maria Cantwell (D-WA) noted this in a speech on the Senate floor today, that the lesson from 1929 should have kept us away from this road that we find ourselves on today. This speech can be found under Daily Issues of the Congressional Record dated for 9/16/08, under the Senate heading, debating Economic Policy at www.thomas.gov


How would we handle another Great Depression? Would we be able to survive with the modern conveniences that we are used to today? Would we be able to remain competitive within the global economy? Would we be able to fight off the terrorists and remain intact as a free democratic nation? I think that these are questions that we might have to answer at some point but hopefully with the wisdom and guidance of the Federal Reserve, Congress, and the President we can avoid this massive decline in our economic standing through-out the world.