Why We Should Stop the Bailouts

The constant stream of bailout funds from the government does not seem to be a fair use of taxpayer monies. Why should the taxpayers be forced to pay for the failures of large companies and individuals? Instead the companies should have to make changes or go out of business and the individuals should be forced to live with the mistakes they made.

The reason the government feels they need to rescue all of the finance and automotive companies is because of the number of people employed and/or invested in them. However, if they were just allowed to fail, new companies would take their places and the employees would be hired there. The investments in these companies is much less than it previously was because their requests for bailout funds cause a drop in investor confidence, so the investments lost would not be a large problem either.

There are several benefits to letting these companies fail as well. One benefit would be that the new companies that replace the failures will be able to be better focused on the future. The existing companies had too many expenses involved in changing their operations, but new companies can start with a different plan and avoid the issue of having to change. Another advantage of having new companies replace the old is that the new companies would be able to learn from the failed companies mistakes and keep from having the same problems themselves. After seeing how all the companies before them failed, the replacements will have a better idea of what kinds of things will lead to their failing. A final reason for which it would make sense to let the current companies fail is that the unions would also be lost. The auto industry is prevented from cutting costs because of the unions, without them they would be able to operate much more efficiently.

As for individuals, there is much less reason to help them. When a company fails there is an effect on many people, but an individual's failure does not have a large effect on anyone but themselves. The only reason for which people would be helped with making their mortgage payments is to help the banks from having to foreclose on the house which usually is not profitable. So there is not a very good reason to help individuals who have made bad decisions either.

Overall, it seems most beneficial not to bailout any more businesses or individuals. Then the government would have less of a deficit and could increase spending to try to correct the economic downturn, which would possibly be more effective than the bailout system.