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Do you
think that the auto companies should have been bailed out by the Federal
Government? Should big banks be allowed to fail? In capitalism, should there be
private companies that are too big to fail so that the government (we, the
taxpayers) must give them loans to stay in business? If so, please explain why.
If not, please explain why. 

 

In
late 2008, Chrysler and General Motors told America that they were in danger of
collapsing. George W. Bush agreed to a temporary bailout, but handed the auto
companies’ long-term future over to his successor, President-Elect Barack
Obama. Obama then drove a comprehensive bailout of the two companies that allowed
them to stay in business but imposed many conditions that, it was hoped, would
secure their viability and allow the companies to eventually return to
profitability.

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The
federal bailout of General Motors Co, Chrysler and parts suppliers in 2009
saved 1.5 million U.S. jobs and preserved $105.3 billion in personal and social
insurance tax collections, according to a study released on Monday. It also saved
about 1.5 million U.S. jobs, however, I believe Capitalism should be a system
that rewards merit. In my opinion, the government should not reward a failing
company when their competitors are more deserving of the profits. I support
antitrust laws that prevent a monopoly from destroying competition, but this is
too far. If a company fails, there is a reason for that, whether it’s that the
company was run poorly or that people did not like their product.

Not
only should big banks be allowed to fail, we should also start breaking up
these big banks. No bank should ever have so many assets that they are
“too big to fail.” Not only would many smaller banks allow for
greater financial security, the competition between them would be an incentive
for them to self-regulate.

 

References:

“The U.S.
Auto Bailout Is Officially over. Here’s What America Lost and Gained.” The Week
– All You Need to Know about Everything That Matters, 10 Dec. 2013

“Auto
Bailout Saved 1.5 Million U.S. Jobs -Study.” Reuters, Thomson Reuters, 9 Dec.
2013, 

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