Government Intervention, economics homework help

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PFVOREG86

Economics

Description

Examples of intervention programs you may select, but are not limited to:

  • US agriculture support programs
  • Low income support programs (Food Stamps, Earned Income Tax Credit, Child Tax Credit, and Temporary Assistance to Needy Families)
  • Medicaid, Children's Health Insurance Program, The Affordable Care Act (Obamacare)
  • Low-income rent controls and housing vouchers
  • Government promotion of renewable energy sources to discourage use of fossil fuels such as coal and oil
  • Unemployment Insurance
  • Bailout of U.S. banks and other financial institutions during the Great Recession
  • Bailout of U.S. auto makers during the Great Recession
  • Social Security retirement benefits

Develop a minimum 10-slide Microsoft® PowerPoint® presentation including detailed speaker notes or voiceover including the following:

  • Describe the intervention and detail its history.
  • Analyze the arguments for government intervention as opposed to arguments for market-based solutions. Hint: See the information in our course textbook on market failures.
  • Examine who may be helped and who may be hurt by the selected government intervention.
  • Examine externalities and/or unintended consequences of such intervention.
  • Determine the cost trend of the intervention program since its implementation including whether costs are increasing, decreasing, or vary with the state of the economy.
  • Evaluate the success or failure of the intervention in achieving its objectives and develop conclusions.
  • Recommend whether the program should be continued as is, discontinued, or modified and defend your recommendation.

Note: The use of tables and/or charts to display economic data over the time period discussed is highly encouraged. However, if your source includes the copyright symbol, which looks like this: ©, then you should not copy any table and/or charts from that source. You could use, but are not required to use, charts/graphs retrieved from the Federal Reserve Bank of St. Louis FRED web site as long as the data sources used by FRED to create those charts are government sources such as the Bureau of Economic Analysis or the Bureau of Labor Statistics.

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Explanation & Answer

Done!

Emergency Economic
Stabilization Act of 2008
ANALYSIS ON GOVERNMENT INTERVENTION

Background on the 2008 Crisis


This is most commonly referred to as the 2008 bank bailouts, big bank
bailouts, etc.



In 2007 the housing market took a turn for the worse as the subprime
mortgage crisis began.



Banks at this point were dependent on bailouts as a matter of historical
precedence.

Background on Bank Bailouts


While the most discussed in modern times, the 2008 bailouts were by no
means a new idea.



Bank bailouts beginning in 1984 in the Reagan administration.



Introduction of the idea of “Too Big To Fail” attitude.



The constant bailing out of banks in American history essentially incentivizes
risky behavior by the banks, as gains are privatized and losses are socialized.

Motivation for Bank Bailouts from a
Government Perspective


Motivation from the government is not necessarily logically unfounded.



The idea is that investors are a huge part of banking.

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