Famine Case

resident Clinton was an advocate for helping minorities and those less fortunate to acquire the typical American dream. Every American wants to have a place to call home, one that can be passed down to their children as they plant their roots and claim a piece of land as there own. Clinton could make these dreams a reality for some by taking a stand against the banks. With Clinton's Justice Department threatening banks with lawsuits and fines up to $10,000.00, banks would have no choice but to lower the loan requirements for applicants (Davis, 2008, ¶5).

"To allow Fannie Mae to make more loans, President Clinton also reduced Fannie Mae's reserve requirement to 2.5%. That means it could purchase and/or guarantee $97.50 in mortgages for every $2.50 it had in equity to cover possible bad debts. If more than 2.5% of the loans go bad, the taxpayers (us) have to pay for them. That is what this bailout is all about. It is not the government paying the banks for the bad loans, it is us!!" (Davis, 2008, ¶6).

With the ever-growing lack of employment, loans were becoming harder to pay back to the banks. Typically, Americans who do not have a decent education do not have decent employment, making it difficult to accumulate a savings account to fall back on should times get tough. Unable to repay their obligations, foreclosures were happening daily and banks were now in need of bailouts. "First, what is a bailout? An economic bailout is when a bankrupt or nearly bankrupt party (like

RECESSION 3

Lehman Brothers) is helped by another party (like the US government) giving them assets, that can be easily converted to cash" (Oliver, 2008, ¶1). Unfortunately, to preserve the value of our dollar, no new money will be printed to pay for these bailouts, that bailout money will come out of the tax payers' pockets.

With a catastrophe left behind from a risky decision from the Clinton Administration, Bush needed to figure out a plan that would rescue the nation. In September of 2008, George W. Bush presented a $700 billion bailout plan to Congress that he claimed was needed to restore confidence in the market and that without an approval, the nation would face a long, painful recession (CNN, 2008). Bush made the proposal with the hopes that companies would stabilize and then banks would be more inclined to approve lending