Justus For All

The thing that concerns me the most is at what point do we draw the line at bailing out various companies. I completely understand how devastating it would be for certain companies to simply fail, but if more and more of them keep coming to the government saying “we need to be bailed out or the United States is doomed,” where does it all end?

At some point, the economy is going to need to truly correct itself. It will certainly be painful for some, but it’s the only way it can truly get back on track, rather than being propped up by the government throwing money at it, regardless of whether or not the money is ultimately to be paid back.

I don’t know that we need to draw any lines. Rather I would prefer to look at the merits and the costs and benefits of any economic interventions on their own.

I am confident on the overall long term resiliancy of our economy, but much less confident of it for specific regions and demographics. Solving those problems is certainly not easy, but I suspect it is necessary, and the best general strategy I have is to keep the wheels from coming off while we try different things and see what, if anything, works.

The issue isn’t really whether or not a specific business or industry “deserves” to be bailed out, but rather, whether it is lawful and moral for the Federal government to do so. Certainly bailing out companies is unconstitutional since it is not a power specifically granted to the Federal government. There goes the legal standing. As for morality, since when it is moral to forcibly take one person’s (or businesses) money and give it to another.

Well, legally of course the Supreme Court has granted the federal government fairly wide powers to regulate the economy under the commerce clause. While I’m familiar with the constitutional argument you are making, that argument hasn’t been upheld and isn’t likely to unless the court makeup changes rather radically.

As for the moral argument, taking one person’s money and giving it to another is what happens with all taxation. We undertake a lot of government actions either to promote the general common good or to solve specific problems. If, as many economists have argued, that bailing out Detroit is cheaper then letting it fail, in other words if the bailout would cost 30 billion but the loss of revenue from the economic chaos that the automakers failure would cause would be 50 billion, I could make the argument that NOT bailing them out would be taking my money and giving to another. In any event, our system allows for our political bodies to determine the best, and most moral, ways to utilize government monies.

Anyone is free to disagree of course, and I often do, and anyone is also free to work to elect representatives that will vote more in line with their view.