American Recovery and Reinvestment Act 2009

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The financial crisis of 2008 was estimated to be the most dangerous since the Great Depression of the 1930’s (The financial crisis, 2009). The catalyst was the 2007 bubble burst of the housing market. This issue spread quickly to the US financial sector and then across other domestic and global businesses. The American auto industry was devastated by this crisis. Detroit’s big 3 companies Ford, Chrysler and GM’s debt problems were exposed as a result of this crisis. These 3 automotive giants were experiencing financial woes they had never previously encountered. This forced them to seek solutions that would allow them to remain a viable entity in the coming years. For GM the bills came in while cash flows decreased. This created an insolvent situation by which they could not recover. This ultimately forced the U.S. and Canadian governments to step in to assist with GM’s bailout/bankruptcy proceedings ("A giant falls," 2009). The ripple effect of the automotive melt down moved to the surrounding communities. Detroit and the surrounding communities were hit very hard. These communities are heavily reliant on automotive and the complementary raw material production supporting the industry. When the big 3 were in an insolvent situation Detroit’s communities began to crumble. This ultimately lead Detroit to declare for bankruptcy protection July 18, 2013 ("Key dates in," 2014). Although, the automotive companies have slowly recovered Detroit has yet to emerge as their most recent Chapter 11 plans are still being questioned. Many of the cost cutting measures will include people losing their pensions. This coupled with loss of jobs and decimation of Detroit’s housing markets continues to perpetuate their financial p... ... middle of paper ... ...n detroit's bankruptcy. (2014, February 3).Detroit Free Press. Retrieved from http://www.freep.com/article/20130912/news01/309120122/detroit-bankruptcy-hearings-date-schedule-rhodes Keightley, M. (n.d.). Net operating losses: Proposed extension of carryback period. In Congressional Research. Retrieved from http://congressionalresearch.com/RL34535/document.php?study=Net Operating Losses Proposed Extension of Carryback Period Niraj, C. (2014, February 22). Detroit’s bankruptcy plan slashes some pensions by a third. The Washington Post. Retrieved from http://www.washingtonpost.com/blogs/govbeat/wp/2014/02/22/detroits-bankruptcy-plan-slashes-some-pensions-by-a-third/ The financial crisis of 2008: Year in review 2008. In (2009).Encyclopeaedia Britannica. Retrieved from http://www.britannica.com/EBchecked/topic/1484264/The-Financial-Crisis-of-2008-Year-In-Review-2008
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