by Jamie Rider

Created on: January 01, 2009   Last Updated: June 27, 2010

With growing unemployment, deflating housing values, wage stagnation and crippling consumer debt, the Government bailout plans are a critical means to avoid this entire generation having Depression-Era like stories to tell our own grandchildren. It was a lack of government oversight combined with failure of the financial sector to regulate by means of common sense that has created today's chaos.

There are ten solid reasons for governmental involvement:

1) Without a working lending system, recovery cannot start.

The Troubled Asset Relief Program (TARP) held several provisions to slow the downward trend. It may even buy sufficient time for the more comprehensive and intelligently drafted plan of President Obama and his economic team to start working. While lending has not yet recovered, the recapitalization of the banks has helped avert more major bank failures. These failures then require government intervention to liquidate, an expensive and inefficient process at best.

2) Old limits on FDIC insurance were inadequate in today's dollars.

The FDIC insurance increase will save average American's savings in the instance of large bank failures such as IndyMac. FDIC insurance and Federal Credit Union Insurance were temporarily increased from $100,000 to $250,000. The benefit is two-fold: individuals know that their IRA or other funds are safe in a bank, and the banks then have the cash reserves to lend money back out into the economy. It prevents the type of run on banks that helped perpetuate the financial crisis of 1929.

3) The TARP provides an opportunity for the tax-payers to recoup their investment.

Historically, when the taxpayers invest in an industry, it pays off. If the TARP can repeat the 6% rate of return that the Chrysler Bailout produced, this may yet be a good-news story for the taxpayer.

4) Patching the Alternative Minimum Tax

There were unrelated tax provisions that can impact middle class Americans in the TARP that may turn out to be the most helpful aspects of the TARP. The Alternative Minimum Tax (AMT) Patch was one of the tax riders attached to the bill. This will put money back into people's pockets by keeping all 2007 filers who were exempt from the tax from it in the 2008 tax. These were the four major reasons for the TARP. President Obama's plan promises to round out the top ten reasons for the bailout with much greater effectiveness

5) Increased Aid to the States

Lower tax revenues are placing state governments in a bind. With the moral and

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