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Have government bailouts proven to be beneficial economically?

  • Less unemployed than would be otherwise

    It's clear that more people would have been unemployed if not for the bailouts. Not only so, but losing those companies and industries would have set the nation back by a generation. If the goal is to minimize the colossal damage, letting things fail is perhaps the worst course. Those promoting the view that failure is a good option aren't considering the big picture.

  • During an economic crisis there is a downward cycle of business where only the government has the power to stop

    The core argument is that bailouts are good for the economy. Firstly, bailouts are generally for large corporations. Which means allowing a company to go under is a huge loss of jobs. Whenever there is a economic crisis in the world, the free market fails and it's up to the government to stop the downward cycle of business and restore the economy to a progressing free market. Secondly, with the auto bailouts we saw a jump in purchasing of American cars (most of witch were at least assembled in America) and when manufacturing is stabilize, so is the economy. Chrysler and GM have begun making newer, fuel efficient cars, the satisfy the needs of the American consumer. Chrysler has been forced to revamp its business model. For example they merged with Fiat and the new CEO has taken out the executive offices on the top floor and replaced them with a company break room(see 60 minutes from CBS). Not only did these bailouts fix broken business practices, they allow American companies to grow abroad. Nearly all of Latin America drives Gm cars and Chrysler has taken a stake in China's emerging auto market( most of these cars are made in America). The alternative to bailouts on large scale multinational companies is the destruction of large market controlling companies is a power vacuum. One which would give Japanese and German automaker scintilla of the American auto market with only Ford as the real competitor. Lastly, the bailouts aren't free money. THEY ARE LOANS, LOANS THAT WILL BE REPAID WITH INTEREST. The government is actually making money off bailouts (Chrysler is 5 years ahead of their payment) and the argument of wasting taxpayer money is ridiculous considering more capital is given to the government to fund schools, infrastructure, etc. In the end bailouts are an effective way of dealing with an economic crisis and resets listing brands as profitable.

  • Maintain money circulation.

    The bailouts provided a safety net whereby the economy could build from. Although it has caused massive debt, our country can not afford to lose the financial sector and expect to maintain a productive GDP. America would have to start from scratch as bankruptcy would cause a domino effect. Lining up in the morning for some bread and a bowl of soup does not satisfy me, which is why I think the bailout was a tough but good call.

  • Made money

    While this is not an entirely desirable alternative to bankruptcy, it has fostered not only innovation in domestic vehicles, but has also retained countless auto manufacturing jobs that help keep Americans employed. That being said, I challenge anyone to come up with a solution that doesn't simultaneously drive up our increasing government debt.

  • Preventing sure failure

    While this is not an entirely desirable alternative to bankruptcy, it has fostered not only innovation in domestic vehicles, but has also retained countless auto manufacturing jobs that help keep Americans employed. That being said, I challenge anyone to come up with a solution that doesn't simultaneously drive up our increasing government debt.

  • yes they prevented complete destruction

    i believe that the current banking system is corrupt and evil however every penny everyone had including business and the government was in one bank or another thus the bailouts prevented all this finance from merely disappearing the bailouts were needed we may not liked it but its a necesity the government howeve should have implemented certain rules such as no bonus for bankers no toxic loans and not corruption

  • Although we'd like the bailouts to produce even better results, they did help the economy a little.

    I think we are all at least a little disappointed with the government bailouts, especially considering that it was public tax money that was given to greedy private corporations. However, when I picture the scenario happening without the bailouts, I think it would be a lot worse. The bailouts prevented bankruptcies, death of industries, loss of jobs and loss of confidence in the banking system. Without the bailouts, the results would be devastating, and much worse than conditions are today.

    Posted by: SpikyWesley
  • I believe government bailouts have been beneficial economically, because the number of job openings have increased, while the national unemployment rate and the rate of mass layoffs have decreased.

    I believe government bailouts have proven to be economically beneficial. According to studies from the U.S. Bureau of Labor Statistics, job openings have increased. Additionally, there has been a decrease in the unemployment rate, as well as the rate of mass layoffs. These studies show that there are more jobs available, and that more people are able to keep the jobs that they have. When companies have government financial support, they feel more secure. When companies feel more secure, employees can feel more secure, too. While economic recovery feels slow to many Americans, the increase in job openings and the decrease in unemployment and the rate of mass layoffs show that government bailouts have been economically beneficial.

    Posted by: PeacefulElwood69
  • I do believe the government bailouts have proved to be beneficial economically, although very unpopular with most people because job growth is recovering.

    Some of the companies receiving the bailouts have paid the government back or is in the process of doing so. GM has recovered, and is working on more electric-type cars for future economical growth. This seems to help to limit our dependence on oil from foreign governments. It takes time to recover, but if we had not had the bailout, we would be in a lot worse shape, economically speaking. I think it was unfair, but necessary, to keep our country from a financial collapse that we would not have ever had a chance to recover from.

    Posted by: TremendousCornelius99
  • Government bailouts have helped the economy, because Wall Street needed a lifeboat for Main Street to survive.

    While it is undeniable that the U.S. economy is still in very fragile condition, there was the potential for a full collapse if the emergency bailouts hadn't been used to save some of the largest financial institutions in the nation that were floundering. Wall Street had to be given a lifeboat for Main Street to survive.

    Posted by: CurvyErich46
  • Government bailouts hinder free market competition to attract consumer demand with superior products.

    When we allow governments to bail out companies we are wasting taxpayer money on saving a company that has spent recklessly and taken risky approaches to try to maximize profits. Tax revenue is to be collected by the government and then spent on services everyone needs. It shouldn't be spent bailing out businesses like GM when the only consumers this benefits are the ones who buy GM products. The capital they would vacate when filing bankruptcy could easily be purchased by stronger companies with a better financial history and a record for profitable growth. Had GM been allowed to fail, Toyota/Honda/Ford could'v purchase existing, now vacant, GM production plants in Michigan and rebuild, hiring up the previously unemployed labor force and bolstering the local economy with a responsible and safe company at the helm. The free market works when allowed to run its course. It just requires people to looks past short-term effects.

  • Governments face hard decisions in these situations

    Governments face hard decisions in these situations. They have a responsibility to ensure the continued survival of the economy, and this indicates that they should have the responsibility of bailing out companies. On the other hand, if they continually bail out companies, it encourages these companies and banks to deliberately take stupid risks that jeopardize the health of the economy as they know that the government will help them if they are in trouble. The government therefore is between a rock and a hard place in this situation. It has a responsibility to help, but not to help too much so that such companies and banks remain accountable for the situation in which they find themselves.

  • Governments face hard decisions in these situations

    Governments face hard decisions in these situations. They have a responsibility to ensure the continued survival of the economy, and this indicates that they should have the responsibility of bailing out companies. On the other hand, if they continually bail out companies, it encourages these companies and banks to deliberately take stupid risks that jeopardize the health of the economy as they know that the government will help them if they are in trouble. The government therefore is between a rock and a hard place in this situation. It has a responsibility to help, but not to help too much so that such companies and banks remain accountable for the situation in which they find themselves.

  • The Self Destructive Act of Pumping Air Into a Balloon With a Hole in It.

    Supply will always meet demand. Always. Period. If there is no demand for something, it doesn't matter how much money you waste throwing at something to make more of what people do not want. I understand if the first time you help bailout, and that instills confidence into the institution, which could in turn generate demand, but we do need to identify where there is no turning back.

  • The answer is simple, No.

    The Effectiveness of Government Bailouts and Stimulus packages, the U.S. Government actively gives companies bailouts and is actively setting up stimulus packages. The result of these (as of Nov. 4 2013) accumulates to a net $-38.9B (B-billion). There is a problem with the governments use and policy of bailouts and stimulus packages, the harm severely outweighs the benefits. Many people argue with the loss of jobs and the effect that would have on the economy being far worse than the debt accumulated by providing the bailout. However let’s take auto bailouts as an example; most politicians favor the auto bailout. They fear that if the big three automakers fail, millions of jobs will be lost. Many people have pointed out that U.S. Bankruptcy law makes this outcome unlikely. When a big company goes into (Chapter 11) bankruptcy, it is not liquidated. Instead, the company continues to operate, while reorganizing under court supervision.

  • Government bailouts force private industries to rely on government aid

    Sometimes whether they like it or not. The obvious argument is the creation of moral hazard, which is found in any situation where you are guaranteed a way out. Think of it as unlimited lives. Why not jump off the bridge if you know you'll end up all right in the end? The taxpayer will cover you. Which, by the way, is unconstitutional. The Federal Government has no basis for creating bailout programs, except perhaps from the Federal Reserve which was created in the middle of the night away from prying eyes. The bailouts are great from the corporations perspective: take the greatest risk you can without fear of the consequences it would normally entail in a truly free market society.

  • Bailouts reward bad decisions...

    Free money for making bad business decisions? Seems like something is fishy to me. Rewarding bad decision making with a second -- or third-- chance doesn't make sense to me. If you got yourself there in the first place you should have to face the music. You should have to dig yourself out of the hole or face the consequences. You wouldn't hire back a teacher once they have done something wrong would you? You would want the best teachers to thrive and the rest to have to fix themselves before they can thrive themselves. Learn from the mistakes you have made. Do not give businesses a safety net so that they can play around with their money.

  • Government bailouts have not worked

    In a free market, business needs to be able to succeed and fail. If bailouts are handed out to anyone, big or small, it creates a moral hazard. Governments should not baby their citizens any more than parents should helicopter their children. How can innovation improve if lessons are not learned from the failures?

  • Gov. Bailout Undermines Long-term Sustainability

    Economic long-term stability and sustainability is the governments responsibility. Government involvement in the free market undermines its regulatory responsibilities, and results in increased expenses to taxpayers. Not only do bailouts send a incentive to fail, it also increase the domestic costs on imported products, domestic products, and deflation of the dollar.

  • Greece

    They haven't eradicated the core problems that have caused damage in the first place. They merely serve as a temporary flotation device for the country that's crashing, without providing any actual long term benefits. The austerity measures bailouts often come with also damage the economy further as they as so severe.


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