Quote:
Originally Posted by Alex
(Post 15690972)
A. Its not a loan. The tax payers are never going to see a cent of that money back.
B. We shouldn't be loaning them money in the first place. Free markets correct themselves. Its the most basic of economic principles. Business are supposed to fail.
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A. Well, it is a loan because we are expecting to get paid back. This is why they are being hardasses about the terms of the loan. They want to see a serious plan that points to them having a profitable future and they want to make sure the pieces are in place to do so. The government loaned car companies money before and they were able to turn themselves around, become profitable and pay the money back. So we don't know that we will never get the money back and are hopeful that we will.
B. You are right. Free markets often do correct themselves and often this is a normal part of business. However, there is a problem with that thinking when it comes to something of this scale. Say we just let everything that was/is in jeopardy fail. That would mean right now most of the banks would be gone because AIG was/is so big that they had huge influence over the banks. If they failed the banking system in this country would have collapsed and banks would have fallen like dominoes. Sure, there would be some small banks left operational, but those banks probably wouldn't have the money to loan businesses to help keep them in business. Then you let the car companies fail. So great count up all the people that work in those two industries and put them in the unemployment lines. Then add up all the businesses that would go under because they can't get loans to stay in business because the banks are fucked and add those people to the line. Add in the businesses that have some cash and don't need credit to operate, but now are not selling things because unemployment is terrible and those that have a job are scared shitless and hording their money. So what are we looking at 20, 30, 40 percent unemployment? That would be fantastic! That will teach them a lesson! Maybe it wouldn't be that bad. Maybe it would be worse. And how long will it take the market to correct from this? Years? A decade? Ever?
On a small scale markets correcting themselves is a good idea. Take for example a small town that has 4 Mexican food restaurants. Then 2 of them go out of business. The other two will eventually (most likely) thrive because they will pick up the lost customers from the other now closed places. The market in that town couldn't support 4 places, but 2 is a good number and they thrive. That is fine. When you are talking about something that literally could effect about 1 in ever 15 workers in this country it is not such a small deal.
Obama isn't doing this to help make the guys at the top richer. If the companies failed and went out of business they would still walk away multi millionaires. He is doing this so that average everyday hard working people don't lose everything they have worked their asses off to get due to something that no fault of their own.
I understand that part of living in a capitalist "free" society is that nothing is guaranteed. You are not promised a job or a nice house or a nice car or, for that matter, anything. But you work hard in achieving a American Dream then some asshat comes along crashes it to the ground. You are guilty of nothing but working hard and doing the right thing, but you still pay in the end. The guy that crashed it to the ground walks away with a million dollar golden parachute. You lose your job, house , car and life savings. Maybe that is something worth defending. Maybe lending some money to the car companies in an effort to keep the pain to a minimum is an okay thing to do.
It amazes me that most people don't care about the trillions we have spent first destroying and now rebuilding Iraq. They won't bat an eye because we were able to kill a couple of terrorist, but when we spend money to help companies stay in business and hopefully rebuild our economy so that they can keep their job/business and continue to create a nice life for themselves suddenly they get irate.
Make no mistake about it. There is no good path with where we have ended up. We now get to choose between eating a shit sandwich (meaning let it all crash and burn, go into a depression and hope we can recover from it) or eating a shit sandwich with some mayonnaise on it (meaning put some money into it and hope that helps a recovery, but ultimately we will have to deal with the debt we create in doing this and that may not be pretty.) Neither are good options, but if we can keep people working and if there is a chance of making things better without letting it all crash and burn, I say give it a try.
