The United States has a record deficit. There is no way that the U.S. has enough money to bail out all of the failing businesses in the country. These bailouts can only send us into further debt. And there is no way to bail out all failing businesses, so how would the government choose who to bail out and who not to bail out? Also, these businesses are failing because of the economy, yes, but also because there is something missing from their business plan that has not made them able to weather that storm. We should focus on social problems and job creation instead.
The government should intervene with the free market and save failing business of a large size that through failure can send a recessed economy into a depression. Intervention should only apply to extremely large employers of 1,000 or more employees, with a clear and concise plan to repay monies and a design of how they will be spent by the businesses.
With tons of businesses failing in this economy right now, it would be prosper to have help from the government and they should start helping. I think if everyone gave back and starting doing what is necessary to make sure we get what we need and not what we want, then businesses will be successful. Stop spending money on what we think we don't need.
I feel that emphasis should go also to smaller business as well. a success business does provided jobs and economic stimulation to communities. That's why small business need to be rescued also because they provide economic balance in a community. When businesses start to fail the community around them stat to fail also. I do fee that failing business need too submit a plan of success that shows what changes they are going to make to succeed. Companies should be able to also show a positive track record that proves with the right resource they can be successful.
The market system is made up of product and services. So much currency changes hands like clockwise and government intervention is necessary to make sure all of the money flow through market system clockwise. Markets and prices are key elements of the market system and government must stay proactive in regulating the monitoring the market system. If they don't someone else will.
The economists assume that government intervention is not required as it obstructs innovation and imposes financial burdens on the society. But some cases such as public goods, externalities, and the prisoner's dilemma requires government intervention to control the problems might result. The government should intervene because there is no "invisible hand" that will solve all of these market failures.
Because the free market system is rigged in favor of BIG business and it isn't a true free-market system. If it were, the price of gas wouldn't jump suddenly overnight and cell phone providers wouldn't be so outrageously expensive and broad band internet would be cheap and available everywhere and the health care system wouldn't be so out of touch with reality because of greed on the part of the insurance provider. Wall Street and Big Banks would not be paying bonuses to their crooks who tilted the system in their favor and by-passed laws and NEVER faced prosecution.
Well without the governments help, there wouldn’t be law and order in the economic world. Also, if government does NOT intervene with the free market, then corruption will arise and take control of America’s Economic System. Also, if free markets do not succeed, then who is to look up to when everything crashes down upon the person? Without the government, things couldn’t go on accordingly.
To prevent monoplistic markets. The government should intervene with free markets because it will reduce the monoplistic markets (as i said before). Failing businesses can be because of lack of exposeser, if government can intervene and hepl these businesses it could prevent them from failing and increase the the economy.
In regards to the source of the housing crisis and economic conditions we face today, many of us following politics for the past three decades actually watched Bill Clinton force Jimmy Carter’s Community Reinvestment Act on mainstream banking institutions and questioned who was going to pay for such a ridiculous government regulation and how long it would take for taxpayers to feel this fallout. I believe it was 1995 when we all felt good about ourselves while we watched Clinton sign his legislation into this bill and closed our eyes to the inevitable ramifications of such an irresponsible act. This would be another can to kick down the road to deal with later. Clinton felt increasing opposition from the banking industry’s attempt to avoid CRA through mergers and expansions, but banks were then forced to comply and also to maintain minority percentages without discrimination based on credit, ability to payback, property location, etc. Everything that assured the security of a mortgage or small business loan was removed for low income borrowers.
Since government was responsible for micromanaging banks into this crisis you would naturally expect government to admit blame and bail out the banks. Well, the blame was passed on to the opposing administration but the bailout had to happen. Regardless of who caused it, the “government” is to blame which means the taxpayer is ultimately responsible for the penalty. Be aware that even though a new health care system was forced on the majority of Americans in disapproval, we will all pay the consequences for generations to come. Our young voters today were not responsible for the failures of our past leaders but they can learn from these mistakes and begin to build this declining nation back to greatness again.
Pay the price, realize the mistake, and fix it at the polls.
The auto bailouts were successful and helped the economy. Sometimes government intervention is needed to save the economy from collapse. The idea is to bailout company with good business economics that should be successful in the future. If a company collapses it hurts the economy a lot more than if money is used to bail the company out.
if not, then there would be monopolies raising prices too high, businesses would start being corrupted, not producing enough goods, and/ or treating employees like they did in the 1800's ( underpaying them, giving them unsafe work spaces, or even bringing child labor laws back). You never know what these businesses could do, if the government didn't intervene and help the employees.
The government stepping in to help the large banks in 2008, and helping the struggling automakers, was necessary. It would have caused terrible problems for the economy if they were allowed to fail. There were a few mistakes but, essentially, the government helped out, then got out of the way, and let the companies run themselves. It was the least evil option available.
The General Motors situation is a good example. General Motors provides thousands of good paying union jobs, and their assembly lines also provide thousands of jobs for their suppliers. The government intervention to save General Motors was a complete success and allowed many Americans to keep their jobs. When done properly, with safeguards for taxpayers, government intervention can be appropriate and successful.
Looking at what happened in 2008, clearly moves to save large corporations prop up the economy and save jobs in a time of serious economic crisis. I hate to think what may have occurred had the government not helped out.
If these businesses start being successful then government will encourage them to start exporting. This way businesses will start making profits and this will increase the money the government earns from profits tax.
Simply to say, according to the mainstream economists like us, we learn from the text book that government intervention will reduce the social surplus.This will give a bad effect to the market, and thus a bad outcome to the main street. The free market should be free from any manipulation by certain individuals and also from the government. We need NOT more regulations,but EFFECTIVE and ENOUGH regulations.
That's like rewarding failure. In a market economy (I purposely omitted the word "free" because there should be regulations and socialized basic services), competition is necessary to promote innovation and lower prices.
This is something that Libertarians on the right and Progressives on the left should both oppose. It gives businesses that sense of Government cooperation. When a business cooperates with Government (Lobbying, anyone?), bad things can happen.
If the government was to get involved with the free market, you would not be able to stop them from intervening in other aspects of the market. The government would only save those that have the biggest fallout and with the most money. America was founded on small business, which the government would not save over the bigger Corp.
Entrepreneurs get into the business field with the knowledge that they can either prosper and fail. By bailing businesses, entrepreneurs gain the profits and security because the message they get is "I prosper, I gain. I fail, others pay the consequences." Failing businesses means that they are not stable in the economy and shouldn't continue.
The government is nothing but gluttony incarnate. It needs to take its heavy hand off the shoulders of entrepenuers and shrink down to the size intended for it in the Constitution. If the recent bubbles (stock market and housing) aren't enough evidence for this then I do not know what is. Http://www.Youtube.Com/watch?V=UvMGHzB37lo
It is necessary that the philibuster of the 1930's croatian civil war be retracted using many rodidendrums wrapped in coliflowers supported by chameleons. If poverty is to be extinguished we need to uncover the current rogue vs. Wade undercurrent sweeping babies out to the motherland and putting all the propaganda into the hands of Mr. Porksword himself.
In order to protect the economy, it is important that the government intervene through regulation. But bailing out large corporations simply misallocates resources, whereas bailout money can instead be used in a more logical setting, by investing in a more growing industry, or by putting into somewhere more useful such as education. Protecting corporations just because they are large undermines democracy, promotes crony capitalism and greatly benefits the rich. Bailouts impede in necessary structural change in the economy, and thus puts taxpayers money into waste. Large corporations should be allowed to fail, since it`s important that future corporations remain small so that they don`t remain a huge asset on the economy. It is never a good idea to protect corporatism, and failing corporations should be praised as a beneficial transition towards a more equitable, and more efficient economy.
That was are last frontier of a truley democratic society. Since the wall street bail out, were are no longer a demoratic society. We fit in to every catagory of a socialist society. This is America the land of the supossesd free. By taking are rights to own and run a business that is not government ran would only hurt us fruther. Seeing how the government has only raise taxes, and the country is still trillions of dollars in debit.
Living in this life, we have to suffer both pain and joy. We had experienced a wealth time, when we spent without thinking, we invested without consideration, etc... and now we all have to repay for what we have done.
Let's imagine that the economics is just like our body, our health. Our body would gain stronger after a disease, and the immunity would be enhanced after suffering some virus. So do the economics. We cannot refuse the interfere of the government, however it should be kept in a reasonable manner so that we will have a vigorous economic system.
It is a free market, in the sense of that a business is free to FAIL or SUCCEED on their own. A business fails because there is either no demand for what the business is offering, or they don't have the merit and right management to succeed. The government however should make it easier for new businesses to start up without a bunch of limitations making it almost impossible to start. They should not however help failing businesses.
No, because the business need to support themselves, and if they are not able to do that then the government should let them fail. If the government intervenes that will just make the economy worse and the government will indebt themselves more and more up to a moment that they will never be able to pay back.
To answer this question we must ask ourselves, 'Why do businesses fail?' Businesses fail when people no longer want the products and/or services that they produce. Businesses failing is not inherently bad, it shows what people want and/or need at that time. If governments prop up businesses it just wastes government revenue and produces products that no one needs/wants, thus creating a misallocation of resources.
When a government bails out a failing business, they are basically suporting big business and leaving the smaller businesses to take a hit. This creates an unfair advantage for those big businesses and hurts the middle class workers who want to start a business on their own. The fact that Washington has any say whatsoever in who wins and loses is wrong and the free market should be allowed to work itself out. Those who are inneficient should be allwoed to fail and those who make things work should be allowed to succeed. The government needs to stay out of this.
Capitalism is an economic system that is based on private ownership and the means of production and the creation of goods or services for profit. Business fail because customers don't buy their products for many number of reasons. Allowing companies to become "too big to fail" promotes and drives a monopoly to form. These companies have successfully shed their risk on the US taxpayer and we are all about to feel it in our pocket book. Government intervention has just ensured conglomerate corporations will continue to succeed and rein over our monetary policy. That sounds more like communism than democracy.
Since we live in a capitalistic environment, a failing business would bring out the sharks and Bains to gobble up the leftovers, create something else designed to fail. People out of work, families in peril and on unemployment. Companies only care about their bottom line and profit margins. Gutters smell blood and move in for the kill.
its just a bad idea.. and while they do that they want to tax people who have the capitol to start new businesses more money. it's just not logical. we need to support the military more because it's really all we have as a country now. small business is a thing of the past.
If a business is going to fail then you need to let it fail. The business that takes its place probably won't make the same mistakes, this will cause the business to be stronger which will allow the economy to become stronger. We are a capitalist country and we need to let business do their own thing. If not we move closer and closer to socialism...or worse communism.
Failing businesses are part of the creative destruction of Capitalism. If a business is failing, its because the consumers don't want it/ prefer another competitor, and/or because that business is too inefficient. Blocking this process takes the same amount of money out of the economy that would be going to the failing business -- but the business will not change, so nobody is better off, it's just postponing the inevitable.
Governments only cause inefficiency through its interventions such as price floors e.g. EU's Common Agriculture Policy which created huge surpluses (excess butter to make a cube of butter with 125m sides!). Price controls benefit a small group of people but the net effect is a negative for society. In order to pay subsidies to farmers or whoever is concerned, revenue must be taken through increased taxes. This redistribution of income causes income inequality and further problems such as low incomes for some, poverty, poor standards of living, criminality, etc. But there is a trade off between equity and efficiency e.g. USA can be seen as efficient (being a liberalized economy) but countries like Sweden and Japan who are inefficient have equitable distribution of income.
On the other hand without government intervention there would certainly be a loss of 'quality certainty' through increased competition and through companies racing to the top (profit maximizing). This causes market failure. Loss of quality to consumers is a loss of honesty by companies and therefore results in a decrease in the standards of living and thus inefficiency. Very very controversial!
If a business is not able to succeed and make a profit by it's own accord, then it is not the role of the Government to come in and support it. Otherwise, why have the idea of a free market? A free market is exactly that -no interference. Let the market operate under it's own steam, and what will be will be.
The government wasn't intervening in 2008 until the crash had already begun to take its toll. They only intervened when The buisness got to the point of disaster. Henry Paulson had to bailout Bear Sterns because they were bad but what happened when Freddie Mac, Fannie Mac, Lehman Brothers, AND AIG started to fail? They couldn't do anything and our economy would have failed and we would have gone into another great depression, did you not hear about the stock crash in 1929? The Emergency Economic Stabalization Act of 2008 stabalized our country. Not the fact that the GOVERMENT DIDNT have regualtions so thats why it all started. We left our choice to the people. If you have any questions watch Too Big To Fail
What caused the 2008 collapse? Government impeding on finance/housing market? There is such a thing called healthy regulation but when you force banks to give unsafe loans and allow people to use their homes as credit, you get debt on top of debt which causes bubbles from temporary increased spending not accurately reflecting real incomes. Government interference like subsidies, tariffs, quotas, price setting hurt the mechanics of free markets by creating an artifical, immoral, biased system. Lowered income families are hurt more by free market disturbances by government then without. If free markets needed all this help then America would not have been the greatest economic engine.
The only true free-market capitalist economies in the world today exist in countries where there is no effective government and no rule of law such as Somalia.
Regulations are necessary, not only to protect consumers’ rights, but also to provide a marketplace where honest traders are not put at a competitive disadvantage by unscrupulous companies that avoid paying tax, put public health at risk by providing dangerous goods or services, bribe of public officials and otherwise engage in shady business practices.
Having said that, it should not be the taxpayers’ responsibility to bail out shareholders who have invested in failing companies and those privately-owned utility company which provides vital public services should be nationalised rather than bailed out if they go belly-up.
1)It distorts the market.
2)It promotes moral hazard, and will increase bad business habits in the future. While new regulations will be in place they will find a way around them.
3)If the business fails all of its assets will be purchased and transferred to new ownership. The whole sector or business won't be lost. No jobs would likely be lost, there would be a short transition period during the bankruptcy where the jobs would be lost but only during the transition.
4)This encourages business to lobby government for special treatment and free handouts even more. This diverts money from producing a better product or service, which benefit society.
The US federal government cannot invest in failing buisnesses because in case anyone hasn't noticed, failing buisnesses tend to FAIL. The government should invest, but well, in investments generally accepted as being good ones. If the government invests in failing companies, the investment fails and the company fails, then that is, by definition, a failed investment and is inherently bad for the federal government.
I do not believe that the government should intervene in the free market system to save failing businesses. Businesses that are failing are failing due to fundamental flaws in their plans and operations, an inability to compete, or a lack of demand for their product. If the government were to bail these businesses out, they would only fail again, due to the same fundamental flaws. The system only works if we allow some businesses to fail, because there isn't enough demand to support them all.
People are motivated to do what is best for the individual. For example, if I was offered a product, I would decide what that product was worth to me and that is the maximum I would pay for it. If both buyer and seller are operating on the desire to do what is best for himself, then the market regulates itself. The only intervention ever needed is an assurance that no one can manipulate the market with violence.
Government intervention often results in disastrous debt and legal proceedings. On the other hand, businesses are built to handle both good and bad times. Unlike the government, businesses have the resources to handle their own matters. Businesses will come and go, as the market sees fit. The government needs to be willing to understand that this is simply a fact and matter of life.
I believe that government bailouts are generally a perversion of the free market system. Failing businesses simply use their political clout from donations in order to transfer public monies to themselves. I think these companies should have to take the hit, and make room for better companies to take their place. Some exceptions could be made when the failure of the company would be dangerous or detrimental to society as a whole, such as in the case of a failing electric company. But I believe these interventions should take the form of nationalization or the government acquiring the company in order to sell it to better management.
Capitalism is the economic system of our country and that means free enterprise. Unless a business is crucial to the economy, and that should be very rare, the government should stay out of the business of bailing out private enterprise. It's just an artificial construct to keep things afloat that shouldn't be afloat.
Failing businesses should get breaks, but the government should not intervene. The government is all corruption and greed and nothing they do will benefit the working class. All they do is tax us more and more. They should leave well enough alone.
The government can no longer intervene like they have in the past with AIG and the big three car companies. A business must be able to stand on its own- that's the way it works in our capitalist, free market system. If it continues to bail out failing companies, how will it be decided which companies to bail and which to let fail? And most importantly, we do not have the finances to keep doing this!
No, the government should not intervene with the free market and save failing businesses because corporations have always wanted government to stay out of their business. The government deregulated everything so now when they want help, the government should not jump in and bail them out. They caused their own failures and they must live with the consequences, same as the individuals.
If business fails, large or small, it has to make its own corrections. Without the possibility of failure, the market will remain in a perpetual state of mediocrity, it will more difficult for an actual good business to replace a propped up, sick business.
The whole concept that led to this hyper-capitalism was "the markets take care of themselves" but the moment the fallacy in that argument became starkly clear, the government rushed in to save the very institutions that most promoted the idea. They have learned nothing, not been chastened or humiliated, they feel no sense of obligation to the nation or its citizens. They still behave like the favored spoiled children they have always been and since there are no consequences for greediness and recklessness they will expect the same treatment next time. Let them fail if that's what it takes to bring them to their senses.
When a country cannot properly feed, employ and house an embarrassingly high number of citizens, bailing out businesses whose owners make financial blunders is ridiculous. In the United States, 80% of the poor and indigent are women and children and that gap between the have and have nots is growing at an alarming rate. Any money the government spends during this economically challenged time should be in the hopes of making life easier for our citizens as a whole.
Businesses fail for a reason. A failing business must either provide a product or service that there is not a high enough demand for, or they must have too many expenses to make a decent profit, or the company might have corrupt employees who are skimming off profits in secret, or maybe the company is failing due to the company culture being unfair or hard to convince employees to stay in.
One of the things that has made America the nation that it is today, is the opportunity for individuals with motivation and an idea to pursue business success. By allowing the best ideas to succeed and the worst to fail, the market allocates human and financial capital in the most efficient manner possible. Government intervention in the markets distorts this process, as it by definition rewards business which are not successful or efficient.
Governments shouldn't bail out businesses that have made bad financial decisions. When the government picks certain businesses to bail out, it gives big business the idea that they are too important to fail. This trivializes small businesses that are important to our country and our business climate as well. If a business fails then it is because of bad management or changes in industry and either way nature should be allowed to take its course. Survival of the fittest!
A free market system is best able to function and succeed only when left alone from government forces. If a business fails, it fails. Failing business should not be rewarded for their poor decisions and bad business practices. Saving failing businesses only promotes further failure and destroys the successes of a free market system. If I make an F on a project, am I better served by learning my lesson and improving future work or by being given an A for bad work?
The businesses that are failing are those who are "too big to fail" -- in reality they are the strong and connected who can by being taxpayers supported also eat the businesses who are too small to be important enough to be saved. It's a way of achieving a bullying to death of the most useful by the least, and will slow if not stop our recovery.
The government should not intervene and save struggling businesses. There are many other people that need government help. It is not the government's fault that the businesses are failing. There are a great deal of homeless women and men. The government should try to help people that have nothing first.
When the government allows businesses to succeed and fail, that is capitalism. When the government controls businesses, preventing failure and managing success, it is socialism. When the government only interferes in failing businesses, it is making failures public - yet it allow profits to stay private. This hurts taxpayers by putting them on the hook for the bad choices of a few business leaders, while not sharing their successes. And by creating a safety net for businesses, it does not discourage safer decisions or better risk management. Why should a business not lend wildly or make questionable investments with a high risk of failure, when the government can bail them out? Thus the act of bailing out not only doesn't help the business learn better but teaches those who are making bad choices that it is OK to do so, risking the repeat occurrence later. And good solid businesses may choose the riskier path in pursuit of profits, creating the perverse incentive for more businesses to take the dangerous route next time.
When a business is failing, it means there is something wrong in the way it operates. Maybe it offers a product or service no one really wants. Maybe it spends too much money/time to produce a product. Maybe it isn't selling enough to break even. Just like a cough signals a cold, losses tell a business it must change. It must innovate, offer new/different products, cut costs, and take other measures to return to profitability if it is to survive. Cost-cutting and innovation are the cornerstones of every successful business, and have brought about many of the products and services that we use today and given us more choices and lower prices. For example, henry ford offered his first automobiles in just one color: black. When general motors started making cars, they offered customers several colors. Ford started losing money, and was forced to introduce more colors to stay competitive. The result was more choice for customers. If the government were to prop up every failing business, it would eliminate this incentive to change. Businesses would become complacent and sloppy. When you are losing $100,000 a year, the sense of urgency forces you to change. If the government comes in and gives you $100,000, you now have virtually no incentive to return your business to profitability. As a result, the economy as a whole suffers from lack of innovation, and the taxpayers are down $100,000. Any government meddling in businesses and the economy is bound to have unforeseen negative consequences. Just ask the soviets.
The reason we're in this economic crisis is because of government intervention; the U.S.A. Is in debt because of it. And they should not bail out businesses, especially private ones, because the struggling businesses will only weaken the economy if kept alive. There's a reason they're failing in the first place, and government assistance will not bring in more customers. It is best for the economy to let that business die off. Also, if I were to own a business, I'd much rather decide my standards for employees (including pay) than the government. Government set minimum wage is pointless because if I pay my workers too little, they will simply leave and I won't be able to hire others. It's all about balance. And the balanced businesses will succeed, enhancing the economy, while the rotten ones die off, also helping the economy. The us economy was great when it wasn't interfered with by government. Debt began when they did.