Altucher Says Bailouts Were Essential

According to James Altucher, people are angry about the taxpayer’s money being used to bailout rich Wall Street executives, when the Main Street suffered all the while. People believe that the unemployment is 5% higher than what it would have been had the bailout not taken place. Although foreclosures are rising, Wall Street executives are getting fat bonuses.

However, Altucher believes that in the absence of the bailout, most of the banks, such as Morgan Stanley (NYSE: MS), Wachovia, Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), Bank of America (NYSE: BAC), would have gone bankrupt.

In addition, several major Fortune 100 companies, including General Electric (NYSE: GE), would have gone either bankrupt or would have had to drastically scale back all of their operations. In addition, most businesses with 20-1000 employees would have gone bankrupt.

Not only this, companies, like AIG, facing a threat to their very existence would have gone out of business. As a result, millions of people would have lost their insurance, spreading the pain to tens of millions of people across the country.

The unemployment figure, which stood at just 10%, would have gone up unhindered to 20%-25%, as more than 50% of the businesses would have closed down. Under such a situation, the cases of violence and civil unrest would have been quite high.

According to Altucher, the S&P 500 index would have shrank to below 400….and the bailout saved everyone from the chaos that would have changed the face of America forever.

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