US $700B bailout vs UK 87.5B bailout

United States President George W. Bush proposed a staggering $700 Billion bailout package to rescue distressed financial institutions in the U.S. after Lehman Brothers, Inc. declared bankruptcy early last month. Despite rejection of the members of the Lower House of the said financial aid, the Bush Administration still believes that the approval of bailout plan is crucial to save their drifting economy.

Heated arguments centered on the use of tax payer’s money only to save and absorb losses of private financial institutions and believed to be more beneficial to the Wall Street rather of the Main Street of America became the deciding point for the No vote of the majority. At a glance, the proposed plan seemed unfair and inappropriate. However, looking at the entirety of the whole economic situation not only in the United States but around the world, without the support of the financial institution, the world’s economy will come to a halt. Credits granted by these financial institutions funds businesses and private loans as well. It is the blood that runs through the veins of every country’s economy and the gauge that tempers the stock market. Fear and uncertainty dominates the air on the trading floor and it is the nod of approval of the US Senate that can redirect the economic flow back to the years of recession and depression.

A deeper consultation was made and finally an acceptable term settled the issue. Rather than to dole out funds, the government will take control of the financial institutions, fund them and keep it running. On the long run, it will not only keep the US economy alive and kicking but it will also sustain the struggling economy of the nations with business alliances with them.