ABSTRACT
Main Street America is suffering. With the housing slump and the financial meltdown of Wall Street, the U.S. economy plunged into a deep recession. The federal government's early response to the economic crisis was to bail out large and wealthy financial institutions. In March 2008, the federal government provided a $29 billion bailout to Bear Stearns. In September, the federal government took over Freddie Mac and Fannie Mae, the two largest mortgage lenders, at a projected cost to taxpayers of up to $200 billion. Then, ten days later the federal government provided an $85 billion bailout to American International Group (AIG). All of these bailouts were surpassed when in early October the Bush administration pushed through Congress a $700 billion bailout for the wealthiest banks and financial institutions, plus $110 billion in tax breaks offered as “sweeteners” to ensure the bill's passage. By the time President Barack Obama took office, the federal government had spent more than $2 trillion and allocated $10 trillion to rescue the economy. It appeared to some that loss and risk had been socialized while profit had been privatized. 1
