Nov
11
Government Bailouts
Filed Under thoughts | Leave a Comment
Company after company is seeking money from the government taxpayers. It’s really starting to make me mad! I found a great website that gives a visual representation of our tax dollars the government has chosen to put at risk. Here’s a nice little list compiled from that website for 2008:
- Bear Sterns – $30 billion
- Fannie Mae/Freddie Mac – $200 billion
- A.I.G. (American International Group) – $150 billion
- Auto Industry – $25 billion
- Troubled Asset Relief Program – $700 billion
- Auto Industry – $50 billion AGAIN?!
That’s a whopping $1,155,000,000,000. If you’re wondering, that massive number to the left is TRILLION! What about that auto industry on that list again? Yes, AGAIN! In September, our elected officials decided to throw what U.S. News decided to call “A $25 Billion Lifeline [to] GM, Ford, and Chrysler.” Now, ailing U.S. automakers are still struggling and are asking for an additional $50 billion. $75 billion in taxpayer money in the course of a few months.
What would happen if we didn’t bail them out? Let’s pretend they fail and close their doors. A lot of people will lose their jobs. Are we going to stop buying cars? Not the way I see it. Cars still get old, break, and need to be replaced. Just because the options of GM, Ford, and Chrysler are not available does not mean people will stop buying cars. Where will they get those cars? The remaining car companies that have done a good job at 1) managing their finances and 2) producing a car of quality. Obviously, these car companies will have an increased demand and will subsequently increase their production of automobiles. How will they increase production? Easy, there will be an overabundance of skilled laborers as the “Big Three” will have closed their doors. Of course, people may have some change in their lives, but hey . . . life = change.
I don’t know how accurate these figures are, but I was looking on Wikipedia for the factories of Ford and Toyota as a comparison. Ford has 133 plants total. 42 of those plants are located in the United States. That amounts to 32%. Toyota, as far as I could find, has 13 plants total. 8 of those plants are located in the United States. That amounts to 62%. Who is the more “American” car company? An article from Forbes magazine gives more detial about production on U.S. soil and the difference in profitability of domestic and import auto manufacturers. This article does an exquisite job of detailing the difference between the ailing U.S. manufacturers and the profitable foreign manufacturers. Quality and efficiency vs. complacency and stagnation. I echo the articles closing line, “I think that it is better to work at expanding the growth than always complaining and blaming others for your misfortune”