How did the federal government respond to the economic collapse in 2008? How does the government's response fit in with various theories of economic policy?

Question

What will be an ideal response?

Answer 1

An ideal response will:
1, Discuss specific pieces of legislation that passed following the economic collapse. For example, President Bush and Congress passed a $700 billion financial system bailout in 2008 . A year later, Congress and President Obama passed the $787 billion American Recovery and Reinvestment Plan to encourage growth and create jobs. President Obama also promoted bailing out the automobile industry.
2, Discuss whether or not the economic stimulus bill worked in helping the economy.
3, Discuss how partisanship and ideology might have influenced the passage of legislation aimed at helping the economy or opposition to it. For example, both Presidents Bush and Obama supported spending over $700 billion to help stimulate the economy, even though they were members of different political parties. Since then, Republicans and Democrats have not been able to agree on how to help the economy recover. For example, President Obama's jobs bill has not been supported by Republicans in Congress.
4, Discuss how Republicans and conservatives are more likely to support laissez-faire economic policies. That is, according to this perspective, government should stay out of the way and let the market sort itself out. Discuss how both presidents Bush and Obama altered fiscal policy in order to try to stimulate the economy. Both presidents cut taxes in an attempt to improve the economy. President Obama also sought to spend money to jump-start the economy.