Why should all these banks and auto companies be saved?

I keep hearing statements from politicians that amount to something like “the alternative to not stepping in and stimulating the economy is something super dire”. This may or may not be true. There is no evidence that throwing a trillion dollars at this problem has any chance of working. But money will be thrown anyway.

Think about this:
Do you see gas lines? No.
Is the mortgage rate above 15% ? No.

This was the case under the Carter administration. So things are not so dire as politicians make it out to be. What all these warnings and dire predictions do is to further depress a nation and quite unnecessarily.

  • Why is it so important to keep throwing money that a country does not have at a problem that may or may not exist and which may not even be solvable.
  • Why should homeowners who do not bother to manage their finances or read the fine print be bailed out?
  • Why should banks who cannot manage their loans and make good loan decisions be bailed out with tax payer money?
  • Why should car companies who as per NY Times columnist Thomas Friedman, are “Wealth destruction machines” be bailed out?

I think all of  these companies should fail if they cannot make it with their own resources. Let new companies take their place and learn from history.

I applaud President Obama’s initiative to cut the US deficit substantially by the end of his first term. But I think it would have been better to gain a handle on the spending right now instead of later. Spending on infrastructure is a good idea but spending money bailing out people and companies is a bad idea and is just not the American way.

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