Did The Bank Bailouts Work? A Look At The Rising Economy

Some years back, everyone wondered why the government was bailing out banks and insurance companies. While people lost their homes to foreclosure (housing assistance programs notwithstanding), the banks and insurance companies were receiving financial help and getting money. Now that it’s two years after the biggest financial rescue in the history of America, the Federal Reserve reports that the economy is starting to get back to normal. Does that mean we’ll all be able to go out to dinner again?

What Does The Federal Board Say?

According to the Federal Board, “Economic activity is leveling out… the committee expects that inflation will remain subdued for some time.” The central bank anticipates that recovery will be slow while the current unemployment rate remains high for at least another year. They also found that the stock market and credit markets improved in the past several months. The benchmark short-term interest rate will be held at almost zero for an extended period of time. You should be able to hold out for that fancy dinner in a year or two when the economy is more stable.

Did The Bank Bailouts Work? A Look At The Housing Market

The Feds will wrap up the program by purchasing $300 billion worth of Treasury bonds before November 1. This program hopes to bring down long term interest rates and hopes to reduce the cost of home mortgages as well as corporate buying. The central bank is already halfway through the plan to purchase $1.25 trillion in mortgage backed securities. This will affect home mortgage rates directly and more noticeably than buying Treasury bonds. This means that you still might be able to keep your house but you’ll need to keep cutting coupons to keep serving those elegant home dinners.

The Job Market & Unemployment Rate

Job security is a major issue and promises to remain one. Across the nation, many people are still trying to manage job loss. Federal officials are most worried about continually rising unemployment rather than inflation. In July, 247,000 jobs were lost. President of the Federal Reserve Bank of New York, William C. Dudley, stated, “The balance of risks is still tilted toward weakness in growth and employment, and not toward higher inflation.” In other words, you should be studying the job market or doing homework to develop new skills even if you feel that your job is safe. And even if you don’t like your current job, make sure you have a new one before you get vocal. In today’s job market, a new position may not be right around the corner. Unemployment is expected to gradually improve in the next year.

Americans Are Working Harder and Smarter

One positive aspect of this shaky job market is an improved work ethic, which is not too unusual during an economic downturn. Worker productivity, which is the amount produced per hour of work done, increased at an annual rate of over 6 percent in the second quarter. Through the recession, productivity gradually improved. This means that you should keep working harder and smarter to keep your job but remember to go home for dinner to get energized for another busy day. After all, we’re all part of the solution toward a more stable economy.

1 thought on “Did The Bank Bailouts Work? A Look At The Rising Economy”

  1. It seems to me that the bailout worked. The government almost broke even and prevented lending from completely locking up. Additionally, they prevented the auto companies and suppliers from going bankrupt. If those jobs disappeared, they probably would not come back.

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