During the fall of 2008 the financial stability of the United States faced big setbacks as the banking industry was shocked by rapid developments in the global economic system. Uncertainty around many newly created financial instruments resulted in massive shifts in prices around the globe. The effect was so destructive that one prestigious banking titan, Lehman Brothers, had to file for bankruptcy. A couple other major banks avoided the same fate only by being bought by competitors at a fraction of the price they would have gotten not long ago.
A number of experts suggested that the situation was so dire that a recession resembling that of the beginning of the 20th century was not only a possibility but even likely. As a result the government felt compelled to do something and the legislature quickly approved a financial stimulus package to help protect the economy from a massive slow down. Congress has budgeted for two types of funds to be spent; one was meant for the banks and other finance companies and the second was intended for the general economy. The purpose of the bill was to accomplish two things; immediately decrease the current risks to the financial sector and also create steady stimulation to the economy to reduce the effect of a depression.
The bill was immediately passed with following administrations and congresses raising the scope of a number of the bail out programs first started. The banks were able to benefit from plans such as the TARP that allowed them to rid themselves of assets that had turned into a burden on their balance sheet. Congress also declared their commitment to helping out the financial firms by working closely with them and other struggling nations throughout the globe. Economic policy such as tax rates and fiscal policy were altered to support the banks.
Additional sectors of the domestic economy were also earmarked funding in the government
stimulus grantspackage. Large amounts of money were budgeted to promote expansion in lots of fields including environmental, criminal justice, and information resources. Funding was also used to start offering education resources to assist anyone out of work because of the economic slowdown. Federal funding was dispensed throughout the US economy through lots of paths such as extended unemployment insurance and subsidies.
Congress's bid to aid the US economy to avert disaster was a highly debated decision at the start and still is now. Some felt the dangers to the economy were not as terrible as many economists suggested while other opponents agreed with the possible risks but felt the proposed cure ineffective. Whichever side of the debate may ultimately prove accurate it will undoubtedly be several years and trillions spent before anybody can be sure of which it is.
The recovery package has meant more funding for the US grant program, learn if you are eligible at http://governmentgrantsapplications.org
