Should the government bail out corporations that have severe financial problems?

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Holly3278

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Hey everyone. Should the government bail out corporations that are having severe financial problems and are possibly even facing bankruptcy? In my opinion, the government should not do that because that means our tax dollars are going to the corporation that couldn’t stay afloat on its own. In my opinion, this only encourages bad financial practices that may have lead to the downfall of the corporation to begin with. If a corporation cannot stay afloat on its own then it should sink in my opinion. However, if the government is going to bail them out then they should be required to pay back every penny within a specified amount of time. What would the Church’s teaching say about this issue?
 
And I would argue that government “bail-outs” have a place in promoting the common good - if it is an attempt to prevent a total economic collapse, but it should be undertaken rarely and with prudence. The Church allows for and even encourages the role of government in society, but always we seek balance between subsidiarity and solidarity (at least, that’s how I see it).
 
The answer is 🤷 “it depends.”

(I wrote out a lengthy response with good examples but my phone deleted it. So you’re going to just have to trust me.)
 
Our Constitution in the United States insists that Congress shall have power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” This is known as The Commerce Clause (Article I, Section 8, Clause 3).

Is it in the best interest of the United States that a large corporation fail; resulting in loss of tax revenue (paid by the corporation, and taxes from the sale of it’s products), and new unemployed workers (many of whom will need government assistance until they can find new jobs)?

Hardly.

It is in the best interests of the United States that as many businesses as possible thrive. Other nations subsidize private industry, so why not us? Look at our main competitor; China. That government bends over backwards to make sure that companies thrive and compete at a high level with US! We cannot compete against China with one arm tied behind our back.

In return for a “bailout”, these companies must be responsible, and answer many questions before the bailout is given. A detailed business plan must be illustrated, and adhered to. And a promise must be made by that company to remail in the United States.

The short answer is “yes”. The auto industry, the steel industry, manufacturing, and tech industry have fled our shores because govenment refused to intervene; and the American people have paid the price with unemployment.

We need government to step in, as they should have done ages ago.

I think the Church would be okay with this because it keeps Johnny Punchclock working and feeding his family; rather than sending him to the unemployment line.
 
Why should the government help out a large business when it won’t help out the small ones too?

Where should the line be drawn?

And of what use is it to the economy to keep a business that is not working alive?

Seems to me the government and economy would be far healthier and more stable if they let the businesses alone to succeed or fail on their own merits.
 
I heard Neil Cavuto interview a CEO. I think it was the top guy at Panera Bread. Basically, I liked him, and liked his business philosophies.

However, he did make one comment I took exception to. He said that America’s corporations are at a disadvantage because of uncertainty in D.C., and that other countries have 10-15 years out economic plans.

To that I reply: That’s what you get paid the big bucks for. That’s business. That’s capitalism. That’s called risking your assets and investments on a bet that you’ll come out ahead.

As for long term economic plans, that’s not particularly capitalistic. That’s government driven policy that, let’s face it, either provides appropriate economic structure for its business climate, OR is socialism. Depending on which end of the stick you’re looking at.

To wit: A national healthcare plan is “socialism,” according to its critics. But a national plan of $trillions to support Wall St. is an economic necessity, according to its beneficiaries.
 
What we have today is socialism for the extremely rich and powerful as well as for the poor. Hence only the very large financial institutions (e.g., BankAmerica, CitiGroup, JP Morgan, etc.) or the very connected (e.g., GM, Chrysler via the UAW) get bailed. While we in the middle to upper middle class to lower upper class are the ones getting squeezed.
 
Doesn’t the government have some severe financial problems of its own?
 
christofirst said:
And I would argue that government “bail-outs” have a place in promoting the common good - if it is an attempt to prevent a total economic collapse, but it should be undertaken rarely and with prudence. The Church allows for and even encourages the role of government in society, but always we seek balance between subsidiarity and solidarity (at least, that’s how I see it).
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I disagree with that, in the US, the Govt has no business ‘bailing out’ ANY privately owned company, no matter how large they are. If that company is so close to failing, then that is the fault of the company, not the taxpayers, and thus, the taxpayers money should not be going to prop up or contribute to rebuilding a failing company.

Our society is capitalistic, many large companies use this argument on their behalf when fighting new regulations and laws, but when that same company finds itself failing and about to crumble, suddenly, they change their tune 180 degrees and think they should be helped LOL

Companies in a capitalistic system come and go, many of them succeed, many fail and disappear, this is the nature of the system, Its best to let them fail and it will lead to other companies taking their place and the leaders of those companies should have learned from other companies mistakes and hopefully run their company in a way, that they will not need to be bailed out.

I thought it was very wrong that we bailed out the auto companies we did, if they were in as bad a shape as they claimed, then that is THEIR fault, Maybe they should have first looked at how the company was being ran, why people were not buying their cars anymore, etc. I would bet if Chevrolet had crumbled and disappeared, a new auto company would have come out of the ashes, or multiple new auto companies, and whether or not they would be successful or not would depend on how their businesses were ran and if the public wanted to buy their cars…its that simple.

Too big to fail, makes no sense to me, if they managed to get that big and all the sudden, they were on the verge of crumbling, then whose fault is that? Maybe it had something to do with the ridiculous prices on new cars and trucks!! I looked at a friends new 2014 Chevrolet 3500 4x4, this thing was over $65,000…for a pickup truck!!! How in the world does a car company justify that kind of price/markup? LOL You could buy a brand new medium duty truck for that amount!!
 
Although it’s not an ideal situation, I think that sometimes it’s necessary to bail out certain corporations. You say let them fail. What happens to the services/products those corporations offer? What happens to all the employees that are working for those corporations and all the smaller businesses that sell products and services to those corporations? The reason to bail them out is not for the corporation itself necessarily but to prevent huge impacts in the economy. Some of these corporations have paid back bail out money.
 
Sunbreak said:
Although it’s not an ideal situation, I think that sometimes it’s necessary to bail out certain corporations. You say let them fail. What happens to the services/products those corporations offer? What happens to all the employees that are working for those corporations and all the smaller businesses that sell products and services to those corporations? The reason to bail them out is not for the corporation itself necessarily but to prevent huge impacts in the economy. Some of these corporations have paid back bail out money.
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What happens the next time they get into rough water though…Do we bail them out again? LOL

Of course they are in good shape now, they were bailed out by the taxpayers, but will only last so long, they WILL get into financial trouble again, thats a given.
 
Sunbreak said:
Although it’s not an ideal situation, I think that sometimes it’s necessary to bail out certain corporations. You say let them fail. What happens to the services/products those corporations offer? What happens to all the employees that are working for those corporations and all the smaller businesses that sell products and services to those corporations? The reason to bail them out is not for the corporation itself necessarily but to prevent huge impacts in the economy. Some of these corporations have paid back bail out money.
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So a company that does not run itself as well as the competition is now free to get itself in trouble again.

The government should stay out of the way and let it fail.

It is one of the responsibilities of the government to help the economy stay strong.
This means letting companies that are not strong fail in favor of the companies that are operating as they should.
 
mikekle said:
What happens the next time they get into rough water though…Do we bail them out again? LOL

Of course they are in good shape now, they were bailed out by the taxpayers, but will only last so long, they WILL get into financial trouble again, thats a given.
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They’re profitable now, technically many of the financial institutions were profitable when they were bailed out. It should be noted though that many of the regulatory protections enacted in the aftermath have already been legislatively rescinded. We haven’t learned our lesson and could be arguably on track to repeat it again.
 
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