How can the economy possibly repair itself without collapsing first?
in the case of a total collapse all the stimulus money spent will have been wasted.
2008 Financial Crisis: What would have happened if Fannie Mae and Freddie Mac were not bailed out and nationalized?
A lot of investors, banks, investment firms, pension funds, endowments, insurance companies would have been wiped out. Almost all market participants would have taken heavy losses.The reason is because Fannie Mae and Freddie Mac guarantee trillions of dollars worth of AAA-rated fixed income securities, which almost all major investment firms owned, and those securities are only worth something if the guarantee is still good. Since Fannie and Freddie are agencies of the US government (hence "Government Sponsored Enterprise"), that debt is effectively guaranteed by the Federal Government of the United States, which is how they have the AAA rating. If Fannie and Freddie had not been bailed out, trust in their securities would have disappeared, and investors would directly take losses when the value of those securities plunged. At the same time, trust in the US government would have eroded and that would have impacted the broader market.To give you an idea, here's a good chart of the overall fixed income market:The parts of the market that would have been directly affected / wiped out would have been Agency MBS and Agency Debt. Just eyeballing it, it looks like that's about 8 or 9 trillion dollars worth of assets, or about 28% of the entire market.
Who’s actually responsible for our booming economy, Trump or Obama?
The economy is doing well because of Trump’s policies. Obama did everything necessary to ruin the economy. He raised taxes, implemented ObamaCare, and over regulated businesses. He did all of this during a recession. Anyone who took Econ 101 in college knows you don’t raise taxes, over regulate businesses, and burden businesses with something like ObamaCare during a recession. That just sends the economy into a downward spiral.Obama’s GDP was never higher than 2%. He was the first president in American history to not have at least one year of GDP at 3%. And, he told us to get used to it. It was the new norm. ObamaCare caused many small businesses to close their doors, or cut their employee’s hours to part time. There needs to be some regulation on businesses, but Obama’s over regulation put too much of an economic burden on them. Businesses started to hoard money instead of investing it. Wages, as well as the economy, became stagnant.Under Trump, however, the GDP was 3% the first year, and pushing 5% this year. How did he do that? He cut personal and corporate taxes. He emasculated ObamaCare, and he cut thousands of unnecessary regulations. Many multi- national corporations hid money overseas from Obama’s tax collectors. Trump had congress cut the taxes on that money to 15% instead of the 39% rate under Obama. As a result, those corporations brought back that money, paid the 15% tax and reinvested it in the American economy. Because of all of this, people got bonuses, that Nancy Pelosi called crumbs. To a congresswoman who’s worth approximatel $25 million, $500 to $1000 is crumbs. To working people, it was a much needed bonus. Because of the tax cut, people realized more money in each paycheck. The stock market is booming, so workers are getting raises as well. 3.4 million new jobs have been created, with more to come. With the creation of new jobs comes the creation of new taxpayers, and the corresponding decrease in people on welfare and/or food stamps. All this juices the economy.Only an Obamaphile in denial would give credit to Obama for this economy.That’s the difference between having a socialist as president (Obama), or having a businessman/capitalist as president (Trump).