Tuesday, December 23, 2008

Bailouts: First the Banks, now the Auto Industry?

Over this past year many national banks have been in trouble. This happened because of bad investments and bad judgments of people that worked for these banks that did unethical loans. Because of the giant loss of banks across the country, the Federal Government decided to step in to bail out these banks in an effort to save the economy. Unfortunately it wasn’t a very well thought out plan. There were banks that used the money to pay themselves big bonuses and pay for luxury vacations, instead of using the money for what it was intended for. Then there were banks that used the money to pay for new investments, some of these banks didn’t even need the bailout money. Now the auto industry is seeking bailout money from the Government. Should these companies be bailed out? Or should they be held accountable for their actions, and file a Chapter 11 while they clean up their act.

The Government I think is going to go about this in a smarter way this time. Some things to consider are what will happen to the economy if they give the money to the auto industry? What type of stipulations will be enforced? We as tax payers do not have a choice. When ever the Federal Government gives a large sum of money to anyone, we pay for it, and usually the money comes from one of two sources, they raise taxes to pay for it or it comes out of social security.

Here are some additional articles related to this post.

How the Feds will Govern GM and Chrysler

Potential GM Bankruptcy Catastrophic for Economy

Wallstrip: Does the Auto Industry Deserve a Bailout?

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