The Economic Advisor

The Cost and Effects of the Huge Financial Bailout of the United States

The former and current US governments have spent a whopping 3.6 Trillion dollars-up to today. Most of these funds were spent propping up the nations bankrupt Banking sector, whilst stimulating the economy through a variety of tax cuts, and other incentive schemes.

The USA today, is one of the World’s largest debtors. Over 25% of the nations GDP was estimated to have been spent on bailing out the economy. This debt will rise as it is based on billion dollar loans from China, and even Saudi Arabia- Loans which need to be paid back in interest.

Treasury bonds were also sold to raise capital to finance this bailout, especially to private citizens, and Governments around the World. Bonds that hold the promise of a fixed, guaranteed annual interest based on the value of each bond.

The numbers speak for themselves, but the results of this bailout are starting to be felt today. Experts claim the US is finally out the worse of the “recession,” although many people claim it is a “jobless” recovery.

Whilst the recovery is uneven, with some states like California suffering the most with massive debts based on real estate speculation. The “Great Recession” is becoming more like a “localized recession,” depending on the financial viability of each state.

However, as there is an uneven recovery, the United States needs to start producing again in order to offset the cost of the debts created by the 2008 crash. Producing not only a Real Estate bubble that burst, but something more sustainable that’s competitive in the global market.

Green energy is one example, but in the 21st Century, Industrialized China, and Asia can produce the very same products, often at a lower cost. This may be the key to a real recovery, and a nation that can start producing jobs, rather than corporate profits based on a rebound on the stock Market.>

Many experts agree that the state of the economy when we enter the next decade of the Century, will determine how strong our economies really are, and whether this century is going to still continue to be the American Century.

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