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When Should the Government Bail Out Private Companies?

By September 17, 2008

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In the wake of the AIG mess Steve Maich asks:
Under what conditions would multi-billion-dollar bailouts of private businesses be acceptable? What are the criteria you’d use, if you were Paulson for deciding when it is prudent to use public money to save private business?
It is a terrific question with no obvious answer. I am good to need to think about it for a good long time. Here is what my instincts say:

Never.

The difficulty is, though, that some companies get "too big to fail" and have to be bailed out. As such what my gut tells me should happen is that, each year the U.S. Federal Trade Commission should hold hearings to determine if, in their view, any companies have become "too big to fail". If so, that company should be broken up into several smaller companies, similar to the Bell system divesture.

It is not an ideal free market solution, but it seems to be a lot more "free market" oriented than using taxpayer money to bail out the biggest corporations in the country.

Again, that is just my gut instinct. I am going to need to think about the problem more seriously.

Comments

September 17, 2008 at 6:55 pm
(1) John Russell says:

The view is unpopular, but I agree with you 100 percent. It seems like an ugly idea to allow people to get hurt, but maybe it would encourage more responsibility. It would also insure that the pain is sharp, fast, and tangible. When these bailouts occur, we never really know what will happen in the long term or how much it is really going to cost. Plus it’s totally unfair for taxpayers that we have to do these bailouts, while the executives that made these messes get to escape with their golden parachutes!

September 18, 2008 at 8:29 am
(2) econ n00b says:

i’m an econ n00b, but i came up with a similar idea. cool, so i’m not completely stoopid. heheh. actually, i was thinking that when a company reached a certain size, it would have three choices:

1) accept additional regulations to protect against catastrophic collapse (no major reorganization required)

2) compartmentalize its operations so that failure cannot sink the whole company (compromise of regulation / reorganization)

3) break them up into smaller companies (complete reorganization)

i’m not econ savvy enough to know the specifics of how to do this or if something similar is already being done. :p

does it make sense?

September 18, 2008 at 6:50 pm
(3) Mary D says:

Mike

I agree with you, and hope federal authorities take your ideas on board.

September 18, 2008 at 7:08 pm
(4) zenosf says:

Well since the feds have already nationalized big companies, here’s the criteria I’d like to see adopted for the sake of the American taxpayers whose money was used to acquire these behemoths:

(1) will the acquisition be profitable? for example, mortgage banks might be unwilling to write down loans, but the government might be willing to do that. In other words, would changes in the company after government intervention result in profits?

(2) guarantee that 100% of profits flow directly into the Treasury. I don’t care if you call this a tax or a dividend. If the gov’t owns the company, all profits should be permanently dedicated to government use.

(3) guarantee that all profits turned over to the government are used to (a) pay off the national debt, and then (b) to help balance the budget. Yes, I know that’s backwards, but since America is putting its ability to borrow at stake, these profits should be used to shore up our balance sheet first.

(4) when the companies are eventually, inevitable privatized, all capital raised from the divestiture should flow directly into the Treasury, and the sell off should happen only if the gov’t makes a profit on the transfer.

September 18, 2008 at 9:31 pm
(5) redslider says:

mike, I quite agree with you that ‘never’ is the idealized answer to when government should insert itself into the market in the bailout fashion we see making its full-scale debut today. However, we probably disagree somewhat on the reasons ‘never’ is a good answer. I happen to believe that “free-market” has its place only when it is sufficiently constrained from control or ownership of the essentials of survival (whatever/however those may come to be defined). Indeed, I think the real question for economics was not ‘who owns the means of production’; but, rather, ‘who owns the means of survival’? In that, I do not think ‘free-market’ capitalism is the appropriate steward of the basic stuffs of life. It’s luxury’s, yes. But, its bare necessities? Absolutely not. Here’s what I sent to my local newspaper about the current “crises”:

>From our perspective, ‘bridge loans’ to AIG and other props are exactly the wrong thing to be doing for improving the economy. Here’s why,

No More Rabbits

I can see no earthly reason why AIG should have its illusion of size and wealth propped up by American taxpayers. The criers of ‘doom’, such as professor Uwe Reinhardt of Princeton (Sacramento Bee, Sept 17, p.A24) are absolutely wrong if their predictions of “spillover effects” are meant to convey some economic doomsday scenario. AIG claims it has considerable assets well beyond its current obligations; that it’s only a “liquidity” problem that has placed it in jeopardy. Well, then, why isn’t AIG simply required to do the same as would be required of any of us — to sell off enough assets to cover their obligations and, in so doing, become the smaller company they really are without all the leveraged illusion, hidden risk, over-valuation and other means by which they have pretended to be much larger and solvent than they were. True, some other companies, the buyers of those assets, might get a bargain in the offering and become a little larger as a result, but is that not how capitalism is supposed to work? What is the government doing, inserting itself in the picture to make this or any other company seem wealthier and more important than they really are? Why are we, the taxpayers, called upon to prop up someone else’s illusion?

If we are really worried about those who are invested in some of those predicted ripples and who really cannot afford such losses, then why don’t we simply insure them in the same way that, say, FDIC insures bank deposits of less than $100,000? There is simply no justification to bailout (or “bridge loan” or whatever you wish to call it) any corporate structure in their pretense of being wealthier than they are, or protect them from their self-inflicted illusions by further sleights-of-hand. That only aids and abets the unimaginably wealthy to further expand their wealth based on a fiction which they have deliberately created. It is time that all corporations (especially financial institutions) had to reveal their real financial operations and real wealth and live within their means, rather than using non-existent wealth as a means of lining their own pockets. In their terms, “liquidity problem” is just another way of saying, “gimme more.”

Republicans are the first and loudest to scream about government living within its means. Why are they so willing to permit corporate America to live beyond its means? The world really ought to know what its worth, not what corporations like AIG, Lehman Brothers, JPMorgan, Chase and the like want us to believe we are worth. It is time for the global economy, as well as our own, to get out of the magic business; there are no rabbits in an empty hat.

Sincerely,

Red Slider
Sacramento CA


———————
Crackpot advice:
Choose a hammer suited
to the type of material
and the size of the pot.

September 18, 2008 at 10:59 pm
(6) Robert says:

I’m starting to think never is the best answer too. The claim is often used with financial services firms, and the reason is always that they are too integrated into the rest of the economy, that letting them fail would be catastrophic.

But I haven’t seen anyone actually explain what the problems would be. And when has anyone ever let a bank fail and see what happens? It seems to me that financial firms have found a great reason to con everyone else into socialising their losses yet privatising their gains.

September 19, 2008 at 7:46 am
(7) Robert Dubois says:

Since I do not believe in the power of the Federal Reserve, nor in the power of the Central Bank, nor in Fractional Reserve Banking, I find it difficult to accept any bailouts. There are two consequences that disturb me. One: We all pay for the bailout with our taxes. And two: Inflation, inflation, inflation. Which is the worse?
Your asking us to pick the least of the 2 evils. My question is why?

September 19, 2008 at 12:49 pm
(8) econ n00b says:

? to robert, banks have failed. dunno exactly what yer sayin. i prolly missed somethin.

i see a lot of philosophical, political, and theoretical talk. nothing practical or real. i’m a n00b but afaik, aig had 1 trillion in assets and was the insurer for a lot of other companies, right? i dun know enough as to whether letting it go bankrupt or bailing it out would have been best. i just see the economy going through a controlled demolition vs. a catastrophic collapse. drags out longer, but less chaos. dunno. i’ve never heard anyone make a detailed case explaining pro’s/con’s of choices aside from generalities. :p

September 19, 2008 at 2:27 pm
(9) Adonis says:

This could get worst before it gets better.
How fast is Congress going to Act on a resolution? I’m worried like hell about my Investments. We all should be. To tell you I believe in a couple of years following this, Inflation will follow.

September 19, 2008 at 3:41 pm
(10) kingdom media says:

it’s hard to object to the government’s mass bailouts as similar debt-producing methods were put into action to bring the U.S. out of the Depression… our economy has been supported and driven by debt ever since

September 21, 2008 at 7:58 pm
(11) Arnold Kling says:

It sounds like a good idea, BUT

The reason you want small banks is that you want them to be bite-sized when they fail, so that someone else can take them over.

But why should I take over a failed bank if the result is that next year the FTC is going to force me into divestiture because I’ve gotten too big?

September 22, 2008 at 8:41 am
(12) Brandon says:

There is no such thing as “too big to fail.” Banks, businesses, and individuals go bankrupt because of bad decisions that exceed their capacity for risk. It is true that allowing the biggest banks to fail will hurt all of those businesses and individuals connected to them, but bailing out the bank to protect their investors and customers takes the risk out of an activity that should be inherently risky.

The idea that investors, business leaders, and even individual home owners should not have to face the consequences of their actions is a moral hazard. While the shock of a catastrophic failure has the potential to spread pain deep and wide, it also serves as a warning to the survivors not to repeat the mistakes of the past. Allowing bad businesses to fail is essential to the proper functioning of the free market system. By propping up the should-be failures we are preserving their inefficiencies and setting ourselves up for an even grander and more devastating failure further down the road. It is ironic that the biggest businesses (who became so by taking over or forcing out their underperforming competition) should cry for protection from the same system that made them rich.

The bail outs are intended to restore confidence in our financial system, but only on the most superficial level. When our government assumes private debts to restore confidence in failing private sector businesses, the debt burden is shifted to the public. We preserve investor confidence in a poorly managed bank that deserves to fail at the expense of weakening international confidence in the US dollar and T-bills, even if only by a barely perceptible amount. The argument that this is the lesser of two evils is a shortsighted one that continues our tradition of piling today’s problems on the future. Borrowing from the future to pay today’s bad debts only creates a temporary illusion of prosperity.

There are two ways to restore real confidence in the free market system. The first way is to allow it to work. Let banks fail and people go bankrupt. Shake the exuberance out of the stock market. Let the buyer beware, understand risk, and remember how to make good decisions based on facts and fundamentals. Let the dinosaurs die to make room for better adapted species. The second way is to scrap laissez faire capitalism and bring on a heavily regulated, inefficient, but safe and reliable system. It appears that our legislators lack the moral courage to do either. In a few days, we will put another band-aid on top of the crisis to make everyone feel better, but fix nothing. Pretending to have a free market system, but stepping in to prevent the necessary market corrections is an economic system based on politics, not economics.

September 23, 2008 at 7:15 pm
(13) Paul says:

When those representing the taxpayers negotiate like VC (Venture Capital) firms.

AIG was reasonable. 12% with convertable. AIG has assets and will pay back the loan as its in their best interest. It was a cash flow problem on a huge scale.

Investment bank bail outs? I have a hard time with that given their business focus and high-flying culture.

Regular banks? Issue gets down to regular (tax payers) walking away from their home loan committments. Yes, banks made the loans, loans traditionally not granted, and its not that hard to walk away and declare financial bankrupcy. But it seems the taxpayer has already taken a big chunk over with Fmay and Fmac nationalization. Start with re-doing loans their and don’t let individuals walk away from their purchases.

September 29, 2008 at 5:03 am
(14) Jordan Rosen says:

When should the government bail out private companies?

Please bear with me a bit ..let’s make this our U.S. Government and let’s make the private companies various financial intermediaries. I figure this what we are talking about anyway.

Comments included the analysis that all of this started 5-6 years ago. Actually, I think it may have started some years before this when securitization of credit was allowed to expand into instruments and procedures that failed to measure and quantify risk.

I’ve just looked at some great comments about decision-making, responsibility, accountability and so on and so forth. And, I am wondering….. what happens when a government … our government or any government…. purposely sets up a system through which assets (think property and homes) may be purchased at no money down, allows for interest only payments, allows for payments to be skipped, negative amortization, scarce or absent documentation, a short (3 month) average LIBOR rate that goes on for 30-40 years and also includes the initial (balloon) review 3-4 years after purchase? And … what happens when that same government smiles on financial institutions (think Fannie)(“we make the American dream come true”…or something like that)that are designed to buy bundled mortgages and are also allowed to trade in derivatives?

By the way, the Mortgage Bankers Assoication tells us that more than 43% of “first time home buyers” (the definition includes folks who haven’t bought a home recently)put no money down. They also tell us that more than 1/2 of the Adjustable Rate Mortgages originated in the 2nd half of 2004 face first rate adjustments within 3 years.

Now, I’m not against home ownership. I think its better than sliced bread. It is historically been a means to gain wealth. But, I’m 100% against
a system that allows these types of instruments (as they are currently packaged) unless they are for the most credit-worthy borrowers. But.. doesn’t that defeat the concept of “The American Dream”? you say?
A very good question …. but please consider this …. if these types of subprime mortgages were sold to folks who could least withstand inflationary pressures in the economy (they were) how can anyone start to value bundles of these same mortgages if we cannot predict costs of goods and services in the coming years? We cannot…and that is one of the main reasons the house of cards has come crashing down.

Let’s take a little closer look at Fannie. Remember the problems they had a few years back? Fannie actually “made good” by making it into Collins’ book “Good to Great.”
Problem was, it was all smoke and mirrors and didn’t take into account long term interest cycles and the fact that Fannie was also trading heavily in derivatives. Entirely appropriate for a stock fund as a hedging strategy but grossly inapprorpiate for an organization with Fannie’s role in the economy.

Does function matter along with size? I believe so. We could have 12 regional Fannies, or 120 Fannie/investment/insurance/commercial banks/re-insurance who knows what blended (multi-functional) intermediaries but … if they …buy up instruments where risk cannot be measured ….and trade leveraged accounts on top of this … how in the heck can they ever think they can even have a glimmer of understanding of what it may take to “secure their position” or “cover their exposure”?

On top of all of this (subprime mortgage mess) we have poor decisionmaking at private financial
institutions relating to “toxic debts” which are NOT related to the subprime mortgages. Remember when the President addressed the nation last week? He stated the action was to deal with debts “which INCLUDED subprime mortgages”.

When our money starts flowing to these institutions I would sure like to know how much is related to subprime mortgages and how much to just leveraged gambling on other instruments. But, I don’t think we’ll see this kind of transparency.

Now, back to the original question about the government bailing out private companies.I actually hate saying this, but I think we need to consider (think about but I do not mean do) this to the extent we are responsible. We (Congress) had an opportunity to do this with Fannie a few years back and did not….not to a meaningful extent. We also had a long, long lead time to look at the “housing bubble” (includes rising evaluations in the face of false and/or inappropriate demand) and rein in adjustable rate mortgages … at least, in so far as some of their must troubling and objectionable (meaning risk-creating) provisions, and, again, we did not.

If we consider a bailout … then we should, in turn, consider the regulations and/or restructuring that, at least, attempt to minimize the risk of deja-vu.

I’m not convinced that there is no alternative in between what Brandon presents. Paul suggests we start with Fannie and Freddie … and I believe that is a good place to start, but I believe the bottom line, must do correction is to either redesign or eliminate the adjustable rate mortgage. The second priority would restrict certain kinds of institutions from leveraged trading.

With respect to the adjutable rate mortgage, either change the review periods and/or the percentage of increases, allow for transposition into a fixed rate mortgage or eliminate it altogether. Another way to control these is to regulate the number/percentage of these instruments against the reserve level of the institution making the loan. Yes, this adds a level of regulation which I do not particualrly like. But, it puts a floor on losses. But this is NOT for the benefit of the homebuyer. It is not even for the benefit of the bank, savings and loan, credit union, investment banker or Fannie shareholder. It is for the taxpayer.

So, I leave to readers who have greater knowledge of economics, regulation and bureaucracy than I have (and make no mistake …..political strategy comes into play here) with this question: is it possible to keep the adjustable rate mortgage (and enjoy the economic growth this instrument provides)
while making it less of a risk (value more measurable) to institutions and, ultimately, to taxpayers? And, if not, what are the economic risks in keeping it or eliminating it entirely? Just before I wrote this … I found over four million sites on Yahoo when I typed in “adjustable rate mortgage + no money down.”

I think we are going to see a lot of discussion about regulation in the future (unless the economy really picks up in which case we’ll just have to wait for the next bubble).

October 7, 2008 at 5:22 pm
(15) Deanna says:

Im sorry but Aig and these other companys should not be bailed out with my money.
Aigs ceo was fired i beleive but hired back as a consultant and given a million dollars a month were is the consequences to your actions thier looks as if hes doing great at the tax payer expence….

October 24, 2008 at 1:00 am
(16) red says:

Can anyone tell me why money given to commerce and finance cannot be conditioned for the specific purpose for which it is intended? Is there any intrinsic reason in economic theory that argues against this?

The only two I’ve heard recently don’t seem to wash:

1) “That’s Socialism!” arghhh. Malarky, – it’s socialism (though, not necessarily bad) when public money is received by the private economy to prop up its interests, for good or ill. Whether its application is conditional or not, is irrelevant.

2) “It would be ‘micro-managing’ our business!” Malarky, again. Companies needn’t take public finance if they do not think it in their interest to do so. Putting a condition (say, you must use it for lending) is no different than a customer who gives the company five-thousand dollars and says, “you must use it to make me a widget”. The public is simply buying something (perhaps mortgage relief for its citizenry). The business doesn’t have to take the order. If it does, it’s not “micro-managment”, it’s a ‘purchase order’.

So, is there some other reason? Why aren’t we dispensing ‘mortgage-stamps’ or ‘credit vouchers’ or ‘make-a-job’ coupons? instead of 700 billion in cash? We do that to citizens when we give them food-stamps, housing vouchers, student-loans…,we don’t even give medicare recipients cash – we have the doctor/hospital bill medicare. Why should the financial sector be so differently treated, so trusted without question to use taxpayer money for the purpose it was intended?

anyone got a clue (besides who politicians are in bed with)?

thanx – red

October 27, 2008 at 4:15 am
(17) Mahi says:

thats good point.but not understand all.i am student of Business Administration.hope i will be as them soon.

October 31, 2008 at 11:08 pm
(18) red says:

did I call it? (post #16) – By any other name, the financial game of ‘free market’ is called ‘looting’. What’s going on is really not much different that what brought the soviet economy down – spending what you don’t have and looting everything in sight that isn’t nailed down. Strangely, communism and capitalism are much more alike than they are different. Just the names of the looters are changed. In one case they’re called ‘The State’, in the other they’re called ‘The Market’.

Sorry, capitalism junkies, but the junket is just about over. The banks have no intention of using public money for lending (or any other purpose but their own quick enrichment). This isn’t just about a ‘new crises’ that just happened, it’s been going on for the past 40 years or so. Every sector of the economy, from consumers (especially the poor) all the way to commercial banks and every niche in between has been subjected to the most outrageous forms of looting imaginable. Looting by intimidation, looting by legalese, looting by offshore havens, looting by fear, looting by marketing and deception, looting by manufactured wars,… You name it and there’s another looter in the public square to rip off whatever they can get their hands on. There is no honesty in the game (why should there be? Their job is to get rich and powerful, not to moralize about how they do it). Forget it, zippo, nada, none. The free market ain’t free, and none of us get to buy into it beyond the penny-ante stuff anyway.

Sorry if I’ve given a negative-spin to someone’s sacred cow, but the whole biz of business needs to go back to the drawing board. Forget Alan Greenspan; forget Adam Smith; even forget Milton Freedman. Start with revoking Southern Pacific RR v. Santa Clara Co. (1886) and work forward until you get through the chain of manipulations on which the present house of cards stands. Then, put the cards back in the deck, toss in the garbage can, get a new deck, reshuffle and see what you can come up with for the next hand. This one’s busted.

red

November 12, 2008 at 8:58 am
(19) Bhagirathi says:

I am a MBA student.I can not understand thoroughly because here there is no such fix definition that help me to understand the meaning.

November 12, 2008 at 11:54 am
(20) Blue says:

I understand that there is no “pure -ism”, socialism, capitalism, communism, the list goes on. But lets just use the basic understanding of capitalism. A company whether large or small thrives or ceases to exist based on the management of its assets and products.

This whole bail out reeks of the new age child rearing. Tell them they are special when they fail, give them something to make themselves feel better when they make a mistake. Never, let a child learn NOT to make the same mistake twice. Because someone will always be there to help them. ANd that is exactly what the government is doing to large private companies.

When I was in the military, there were many month that I couldn’t pay my bills. Did the government say, it’s okay we’ll lend you some money? Nope, they just wanted theirs come tax time. So I couldn’t pay my bills, so what was the solution? Go out and get a second job or better yet, jump ship and get a better paying job. I was taught to survive and fall on my own, there was no Uncle Sugar or a safety net.

Now I understand that many companies would go bankrupt, probably within a year. Yes, people would lose their jobs, and that would really suck. But how else is a capitalist/free market expected to grow, change and adapt to it’s environment? We as consumers do not get a better product if the companies get hand outs? Yes, they are supposed to pay the loans back. But who really believes that will happen? There will be some sort of tax shelter that they will use to side step their (if nothing else) moral obligation.

Using the newly acquired companies profit margin to pay off the debt, cannot and will not happen. Markets survive on supply and demand, debt and payment. The last person to even come close to balancing the budget was Andrew Jackson and he was impeached because he put the country in a financial upheaval. There’s gratitude for you.

I say let the companies sink or swim just like the average “Joe the Plumber” has to do.

November 12, 2008 at 11:13 pm
(21) Brandon Simpson says:

I don’t think the government should be bailing out these companies. The CEOs are millionaires who let their companies get run into the ground. Let them bail themselves out.

November 24, 2008 at 11:54 pm
(22) red says:

The bottom line on this entire discussion is, regardless of what any of us might think, we must bailout (‘ransom’) our economy from those who have looted it. The reason is very simple. They, the owners and architects of our brand of capitalism, hold all of us (workers, small business, poor and middle-class citizens, students, children and older citizens, welfare recipients, all of us) hostage to their design for an economy which serves their own interests. As long as ownership of the means of production includes ownership of the means of survival, ordinary citizens will be used as hostages to ransom the “public interest” for ever greater contributions to the wealth and power of a very few.

All of the shibboleths which make us cringe and concede whatever the looters demand (“It’s to create jobs!”, “if we can’t borrow, a recession will follow,” “Main Street depends on Wall Street,” ad nauseum) are the inventions of owning beneficiaries which the rest of us are supposed to swallow as unexamined certainties. And we do.

This round of bailouts is no different from any other pyramidal scheme the operators of our economy run us through on our daily regimens of consumption. They ask for thousands of times more than the public interest will ever see in benefits from their “rescued” position. Not any different than the differentials we see between the compensations of management and the less-than-living wages paid to the rank and file worker.

That is the way it is. That is why we must buy them off and save the hostages until the next round of looting. It doesn’t have to be that way. We can organize, demand and make democracy something more than the consent of the governed silently waiting for instructions (if you noticed, Obama’s campaign was no different – a one-way communication system that offered no place for our ideas or demands to funnel upward, only the stream of pleas for more donations; no empowerment to organize around our own needs and issues, only the nebulous offerings of Brand Obama’s or Brand McCain’s definitions of our responsibilities. )

I’m only sorry that this blog has seen no further posts from its moderator. Mike, what do you have to add to this discussion? What have the comments meant to you? To what end are we even expressing our opinions here?

I think the current question has worn itself out. Perhaps its time to move on…

February 24, 2009 at 1:54 pm
(23) Haley Dunksiey says:

For me, I strongly agree with you. Some companies though support citizens whether they are insurance companies or otherwise. I believe that the government should bail out the people, not the company. Leave the company to fend for itself. Not everyone deserves or is entitled to a second chance. Escpecially,when the government doesn’t even know where the money is going.

September 23, 2009 at 10:43 am
(24) Sasha Mabika says:

Well look at this in an objective manner. If it were not for this depression, that was i agree, forecasted most businesses would not be in this hot seat. These directors of these private businesses that you are saying should be sacked like you, have a family to feed and bills to pay. These businesses have helped the economy, your economy may i state, to build and now because they need aid you won’t help them? These businesses provide employment and im sure, almost positive that you wouldn’t want to wake up and have absolutely no source of income. I would like to disagree with what Miss/Mrs Dunksiey stated that “i believe that the government should bail out the people, not the company” however the company is the people. The shareholders i.e. you the general public are the investors and that simply means once again that it is the people who are unfairly being punished.

In a nutshell,i am saying that letting these businesses run down should not be an option, but maybe helping in the sense of providing a payment plan which would be the state basically LOANING money to these companies and expecting it back, with Interest once the business is up and running, could be the next best option.
I urge you not to forget these are your jobs, your economy, your inflation and your life.
Think about it.

Sasha Mabika
17 year old African

February 2, 2010 at 8:25 am
(25) David says:

econ n00b, just curious if you talk like you type. Please finish grammar school before posting. This explains why education is where our public money should be going instead of private industry.

Never, never, never, bail out private companies with public money. They made their bed, and if it fell, let them lay in it. And if the public falls with them, then they may make better decisions when they fall too. Live and learn – this is democracy, not socialism or communism. The government needs to step back and let people make their own mistakes. Public money is suppose to be going to such things as education, food, and medicine, especially to our young and old. The middle aged fools running these private companies are only out for greed, so why help them. Their assets will sell off and someone else will make a gain, this is what capitalism is all about. Help those that are to run our country tomorrow, not those that screwed it up today. Spend out tax dollars on education and the hungry, not bulging the pockets of those handing out loans to those that have no business having one.

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