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7 Points
The Contender
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14 Points

Obama's Bailouts are Failing

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Voting Style: Open Point System: 7 Point
Started: 4/4/2009 Category: Politics
Updated: 8 years ago Status: Voting Period
Viewed: 2,304 times Debate No: 7688
Debate Rounds (2)
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I am arguing against Obama's bailout on the platform that the bailouts are failing.

I would like to start my debate by defining fail and bailout:

fail - to fall short of success or achievement in something expected, attempted, desired, or approved

bailout - an instance of coming to the rescue, esp. financially

Now I would like to say that the bailouts are a failure using the dictionary definitions of both words.

A) Obama has spent billions of dollars on financial bailouts on companies deemed vital to the company. Obama spent 85 billion dollars bailing out AIG and almost 100 billion dollars bailing out General Motors. AIG now is in trouble for permitting their executives to take million dollar bonuses that the Obama administration approved (unknowingly) and General Motors is still billions of dollars in debt. GM has lost thousands of jobs and Obama was forced to oust the CEO. Despite government help and assistance the company is still failing. The bailout did not work.

B) Congress does not know what they are voting on 90% of the time. When they voted to allow AIG their second bailout they also voted on the approval of the million dollar bonuses that caused such a controversy. Of course when the executives took their Congress approved bailouts people freaked out, Congress included. They were shocked when they found out that the bailout bill included the bonuses (which most of the AIG execs. gave back. They aren't the bad guys here.) which just goes to show how little the Congress actually reads what they are voting on. They follow President Obama blindly, like misguided sheep.

C) I believe the economy runs in cycles, every so often the economy must go down in order to come back up. You can look at a recession timeline and every ten years or so the economy goes into a recession. Yet despite this very clear piece of evidence the American people still freak out. Are recessions good? No of course not but the economy always comes back up. Mr. President fails to see this and with his continuing attempts to fix the economy is flooding the market with more and more cash (which can only lead to inflation, not a good thing in hard times). If the economy is going to fail in order to rebuild I say let it. Throwing billions, almost TRILLIONS of dollars at it is not going to fix it. If anything it is going to prolong the economic struggle.

D) My last point resides in the number of job losses since Obama came into office. This month [March] 663,000 more jobs were lost bringing the unemployment rate up to 8.5%. I am not saying that the bailouts caused these job losses, I'm sure they were inevitable in these hard times but what it did do was blow billions of dollars to no affect at all. Despite the spending the jobs continue to be cut. They are effecting nothing but the national debt. The bailouts are failing [see definition up top, it describes exactly what the bailouts are doing].

I applaud Obama's attempts to fix the economy but enough is enough. It's not working, give it up.

I thank anyone who accepts this debate and look forward to a response.


Let me first take issue with your initial conclusion and your definitions which therein causes your debate to fall on its face.

The bailout was a resounding success based on the information you provided. It is not, by any means, intended to be a long-term solution or a part of a viable business model. As CPR is only intended to stimulate one's heart until a defibrillator can be brought in, these bailouts are merely a means with which to prevent bankruptcy in these two instrumental companies. Let me address each specifically and explain to you why each is vitally important to the American economy and what else the U.S government is doing to help them.

AIG is a large part of the bedrock of the American economy. Their failure is due not to their own negligence or irresponsibility, but rather due to the American's government failure to set and outright removal of guidelines that would clearly define what can be considered dangerous or risky to the U.S economy. Because these laws were not set, AIG did as any company must do; it responded to its shareholders. Companies like AIG were being left behind by hedge fund managers and other, smaller banks who were cashing in big-time on the housing boom. Their actions were merely part of their obligation to do whatever they can, in the confines of the law, to maximize profit for their shareholders. What's more, the Clinton and Bush administrations actually encouraged this risky mortgage trading so as to provide lower-income Americans with affordable homes. These Americans began to default on these mortgages in 2007/2008 and so the economics crisis began. These mortgages (dubbed 'toxic assets') are a burden on the books of AIG and other banks and it ties up their assets so that they can no longer provide new mortgages to responsible homeowners or give loans to cautious investors. What the American government did was to infuse cash into this bank and ensure that they not default. By doing this, the American government saved a company that did only as it was supposed to, and was hit with an unexpected recession. Assuming that AIG can limp out of this recession, infused with government cash, it will almost certainly recover its losses. All banks are suffering, but by 2010 they will begin to see a reversal of their fortune. If the American government can ensure that no more banks or insurance companies fail until then, they will see 8.5% return rates on their investment, which will help to pay off debt in the future (5 years.) If we were to allow this company to fail, it would entail a deepening of the recession, higher homelessness and increased unemployment all around the world.

General Motors is a different case. The bailouts are merely an anesthetic for their eventual collapse. The American auto industry, while patriotic and nice as it is, cannot survive. It is an inefficient company that simply cannot compare to the motivated, low-wage workers of China. The unions, while well-intentioned, have pushed up benefits for auto workers to the point where it will actually cause them to lose their job. Sad as it is, it is unavoidable. Where the manufacturing of automobiles is large automated; anyone can do it. To think that it requires a special American fortitude and ingenuity is incorrect. While this may be the eventual reality, now is the exact wrong time to let GM fail. The company needs to be slowly led out, its workers need to be retrained to work on other (probably tech-based) industries. This is a long-term solution that must be worked out in times where there is a high demand for skilled workers. Because we are currently in a recession and there is practically no jobs for unskilled assembly-line workers, they will likely find jobs, therefore their incomes will be greatly reduced, they will rely on welfare and they will not spend or invest. This is exactly what turns a recession into a depression and will cause more industries to fail. Furthermore, the government is killing two birds with one stone as it has committed itself to investing in green energy and green automobiles, which the Chinese and Indian industries simply cannot ensure. GM is shedding jobs but you must realize that it is the only thing ensuring that these 5,000 job losses do not turn into 250,000 lost jobs is the U.S government.

You can say what you will about the bonuses, but it hardly seems like reason to allow your economy to fall apart at the seams. Yes, the economy is cyclical, but any economist will tell you that anti-cyclical activity must happen so as to lessen the effects of any recession. The economy further says that yes, throwing money at it absolutely will help, which I will expand upon later.

Your final point fails, as it is an illogical post hoc conclusion. Unemployment has occurred under Obama, as it did under Bush and as it would under anyone. He has unequivocally helped to stem the losses and protect many jobs.

Obama is the last line of defense from a truly painful re
Debate Round No. 1


youngpolitic forfeited this round.


It is evident that I have won, as my opponent decided he would rather delete his account than face me any further.

Thank you.
Debate Round No. 2
3 comments have been posted on this debate. Showing 1 through 3 records.
Posted by MistahKurtz 7 years ago
You didn't answer me and my arguments were utterly more convincing, therefore I won.
Posted by youngpolitic 7 years ago
My account is active idiot, you didnt "whoop" me.
Posted by MistahKurtz 8 years ago
Apparently my opponent's account is no longer active. I had no idea the whoopin' was that severe.
3 votes have been placed for this debate. Showing 1 through 3 records.
Vote Placed by JBlake 7 years ago
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Vote Placed by youngpolitic 7 years ago
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Vote Placed by MistahKurtz 8 years ago
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