About four years ago, representatives from the three major American automobile c

Question

About four years ago, representatives from the three major American automobile companies went to Congress to request bailout relief from the U.S. government to prevent possible bankruptcy. This came after a major insurance company, financial corporations, and many banks had been given bailout money to sustain themselves and to make loans.  
Do you think that the auto companies should have been bailed out by the Federal Government? Should the big banks be allowed to fail? In capitalism, should there be private companies that are too big to fail so that the government (we, the taxpayers) must give them loans to stay in business? If so, please explain why. If not, please explain why.Please do research on these government bailouts before you give your answer.

Explanation / Answer

Untold thousands of workers depend on the solvent operation at General Motors, and, given the precarious position of the economy, losing the liquidity that was represented by General Motors and all of its related businesses the shock of a Chapter 7 bankruptcy could have had significant repercussions to the overall economy. Trade-off: Bailout vs Depression, I go for bailout.

I agree that there are certain times where the government needs to provide financial assistance to companies because it in turn effects everyone if they DO fail There are many Americans out there right now with no jobs, no money, and no right way of life. We do not need to help increase that percentage of unemployment. What we do need to do is let the government in times of great need, even though it seems like an intrusion on an American's rights, the government is helping those Americans that have no say as to whether or not they should lose their job. The government is ensuring our safety and prosperity. "See a need, fill a need,"

There are companies that are so interconnected to the day-to-day life of the average American that their failure would have consequences that could lead to the failure of the U.S. economy. As an example, a failure of GM would have resulted in a loss for more than two million jobs, directly, and another 1.5 million jobs, indirectly. This would have raised the unemployment rate to more than 15%. The direct cost to the U.S. government would have exceeded $450 billions dollars, a lot more than the $150 billion in bailout aid granted. This doesn't take in to account profits that the government will make on the stock and options granted, in return for the bailout funds.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.