Bailouts are a bad idea because they don't do anything to fix the reason why these companies are failing in the first place. These companies should be allowed to fail, declare bankruptcy, and restructure so they make a profit. You also have the issue of the government trying to control these companies even more when they bail them out. The school of hard-knocks teaches very well and I guarantee you these companies will come out better.
I agree with this, bailouts do not fix why the company is failing. However, it is valid why the government wants some control over a company it has bailed out, seeing how its virtually a large (if not main) shareholder and deserves the right to have some control as being one. Although, if i were president and could go back in time to stop the bailouts would I? No, simply because the bailouts in some form were necessary. The main reason, in my view for having bailout is to temporarly prolong the companies fall or to allow some restructuring without having to declare bankruptcy (which can be several detrimental for the company). If all these major companies fall within the same SHORT period of time, it WILL scare investors and they will take their money out of the economy which will make things worse. I'd view it as a domino effect.
Styrax wrote:History shows us that these big gov't bailouts never work. The New Deal did nothing to help the economy, but it did make it worse (it even created a depression within a depression in the mide to late '30s). The only thing that brought us out of the Great Depression was the post-WW2 era where the gov't eased regulations on the economy. Just about every recession since then has it's ties to gov't regulation. The current mess we are in now is caused by gov't regulations, pressuring banks/lenders to loan out money to people they ordinarily would not give out.
I don't blame just the government. I blame individual citizens who want what everyone else has and refuse to work for it. They have no sense of personal responsibility. They all think someone/everyone owes them something.
As for BO's economic "stimulus", where will it stimulate anything. This is time to truly stimulate the economy. Tax cuts across the board. We all know how much money the "messiah" wants to spend, and tax cuts has been proven to increase gov't revenues (another problem with this game). Even BO knows the less taxes you pay, the more you have to spend, just ask any of his Cabinet appointees. Everything else in his stimulus and budget will cause real harm to this country. California has tried all that and you can see the problems they are having now.
Like I said, just my two cents.
Reality check: It wasnt tax cuts that got us out of the great depression, it was MASSIVE government spending. The New Deal had 2 basic problems with it, which is why it didnt get us out of the depression.
1. it didnt go far enough, not enough was being spent. I dont blame FDR for this because at the time this was expiermentation to a degree. Also, no industries were taken over by the government, or atleast controlled/managed to a degree.
2. It didnt create enough sustainable jobs.
There might be other minor problems, but those were the 2 main problems with it.
Almost all historians agree that WW2 got the american economy out of the great depression, at it would be foolish to argue with this. Now, how did ww2 get us out of the depression? Was it laizze fair free market? No! Was it slightly regulated free market? No! It was state capitalism at its extreme which got the economy out of the great depression. Government spending was at its HIGHEST during WW2. Lots of manufacturing industries (some industries not even ORIGINAL related to war production, like a toy factory) were either taken over by the government OR managed by the government, depending on how one views it.
Just for the record, I think it would be very foolish for the government to nationalize any industry (besides the banks) as of now.