Bailout

The Washington Post is running an article entitled, "Bush Administration Seeks $700B for Economic Bailout." According to the article, the Bush Administration sent a legislative package to Congress today that represents "...the most sweeping government intervention in the markets since the Great Depression. (The package) was $200 billion higher than lawmakers had been told yesterday to expect. It also does not include the $200 billion that officials said earlier this month the government will spend on the rescue of Fannie Mae and Freddie Mac." The article further states, "The timing of the administration's plan reflected in part mounting concern about money-market mutual funds, which were widely regarded as safe havens until the bankruptcy of Lehman Brothers caused a major fund to post a loss this week. Officials feared a massive run as investors withdrew about $200 billion during the week, including $50 billion on Thursday, according to Crane Data, which tracks the industry."

Read the Article!!

Discussion Questions for Younger Children

• If your mom or dad gives you a little bit of money to buy something and you lose the money do you think that your mom or dad should give you more money to buy the same thing? Why/why not?
• Do you think that store owners like it when you buy things at their store? Why/why not? How do you think a store owner would feel if he knew that you had wanted to buy something at the store but lost the money? Why would he/she feel this way?
  
• Where do you think is the safest place to keep money that somebody gives you? Why is this the safest place?
  
• Has anybody ever lent you money? What did they lend you the money for? Who lent it? Did you return the money? Why did you return the money

Discussion Starters for Older Students

• Vocabulary terms to discuss: "Mortgage Securities"; Intervention; "Market Guy"; and, "Corporate Finance."
  
• The article states, "The plan would allow the government rather than the cold judgment of the marketplace decide the winners and losers from the crisis..." How will this plan allow the government to determine the winners and losers from the crisis? Do you think that the government should support banking institutions financially so that they don't go bankrupt? Why/why not?
  
• Respond to the following statement: "Perceptions towards the market economy is as important as anything else when it comes to the successful development of a market economy." Explain! What does it mean for a market economy to develop? What prompts this development? Why might perceptions be so importants?
  
• What can we learn about President Bush from this article? Explain! Do you think that the President means well? Explain! Does it matter if the President means well? Why/why not?