Bailout Bill Benefits
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Bailout Bill Benefits
The United States economy is going through an economical crisis. Today, it is harder for businesses to get a line of credit from the bank. This is particularly awful for those who are trying to establish a business for the first time and need a loan. Everything in the economy is interconnected, and when something gets interrupted and cut off, it may damage a great deal of other things. To save the economy from this predicament, the United States Treasury developed the Bailout Plan. There is a huge controversy to whether this bill should pass or not. Positively, the Bailout Bill will save student loans, help homeowners, and curb unemployment rate.
According to an article by the FOX News network, President George W. Bush stated that the credit crunch is threatening the availability of student loans, and in Bushs weekly radio address, he quotes “A slowdown in the economy shouldnt mean a downturn in educational opportunities.” Bush also stated that the Education Department was stepping up efforts to make loans directly available to students. President Bush signed the $700 billion Emergency Economic Stabilization Act, which went into effect October. 3. The bill expanded its bailout plan to include buying student loans held by banks. Banks can loan and it will have a positive effect on students, making loans more accessible. Benjamin Keen, economics assistant professor, said if the bill had not passed, students could have been in more trouble because private student loans would be harder to find (Hughes). Students can now continue to attend college with ease knowing that their student loans are ensured with the help of the Bailout Bill.
In addition, homeowners at risk of foreclosure may benefit from the bailout bill by being able to modify their mortgages. The purpose is to lower the payments to an amount that homeowners can pay them consistently. Organizations similar to the National Association of Realtors are pleased with the legislation for helping individual homeowners by minimizing foreclosures which help stabilize the housing market. Lawrence Yun, chief economist of the National Association of Realtors asserts, “Now there is an ability to hopefully quickly modify loans that people are having trouble paying and that will lessen the foreclosures” (Bahney). Changes may include lengthening the loan, reducing interest rates or writing down some principal. This is a huge advantage for homeowners since the Bailout Bill gave them an opportunity to modify their mortgages in a way that suits them.
Last but not least, the jobs situation already looked uninviting before the recent financial meltdown, and some expect that it will get worse. The national unemployment rate reached a five year high of 6.1 percent, about 9.4 million people, in August (Lee). To fix this issue, the House