Governments should interfere in the credit crisis

As a consequence of the subprime mortgage crisis, a variety of government bailouts were implemented to stabilize the financial system during late 2007 and early 2008. Governments intervened in the United States and United Kingdom and several other Western European countries, such as Belgium, France, Germany, Ireland, Luxembourg, and the Netherlands.

Some Facts
The dutch government is interfering in the credit crunch, both for people as business. They do that on several aspects:

Employment: Temporary arrangements for reduced working hours, under which employees can apply for unemployment benefit on a temporary basis; Regional mobility centers to help people move on from one job to another; Accelerating the development of infrastructure projects, as for example the new Delta Works project.
Preventing bankruptcy: In October 2008 the Netherlands raised its guarantee on savings to 100,000 euro; Where necessary the Netherlands will strengthen the balance sheets of generally healthy financial institutions by injecting capital. 20 billion euro has been made immediately available for this purpose.
Government interference by loans: The government is prepared, subject to conditions, to secure loans extended between banks and by institutional investors to banks. This is intended to get credit flowing between financial institutions again. The government anticipates that the State may have to guarantee a total of 200 billion euro worth of loans; Swifter payment of bills by public authorities. This should chiefly benefit small and medium-sized enterprises.

I think that it is necessary for the government to interfere in the credit crisis. On the first place the government is trying to limit the unemployment which will arise in a credit crisis. By interfering in this, people and companies -on the short term- benefit from it.
If the government wouldn’t have interfered, the credit markets would have collapsed. This would result in a breakdown of the financial systems. Government intervention was needed to save credit market on the short term. Re-regulation of financial market is needed to promote responsible behavior in order to prevent stuff like this from happening again.
The key is to avoid a spiral downward and the easiest way for government to do this is to increase spending, or temporarily induce more private sector spending.

The government caused the credit crunch by approving loans, so they can partly held responsible for it. They have to solve the problem and that’s what they are doing right now. So therefore they should interfere in the credit crisis to prevent us from getting in to a crisis like in the 30’s or 80’s.