- #36
Cyrus
- 3,238
- 17
D H said:Almost here is using emotional arguments: capitalism is good so we should let the free market run its course, capitalism is evil so we should let the beast die, GM killed public transportation and is the cause of global warming, GM's cars are UGLY. This is supposed to be a rational forum.
Rational arguments against bailing GM out
- Our government has historically kept its dirty mitts out of businesses' business (for the most part), and that hands-off attitude is one of the reasons for our country's economic success. Bailing out GM sets a very bad precedence.
- Just because we bailed out Chrysler in the past doesn't mean we should replicate that mistake.
- Their is no guarantee that bailing GM out will succeed and there are plenty of indicators that it won't succeed. The maxim "Don't send good money after bad" comes to mind. We will spend a lot in bailing the company out and we will spend a lot again when it eventually goes bust. It's better to just spend a lot if and when it goes bust.
- The potential that they will go bankrupt is forcing GM to act a little smarter than they have in the past. They might well work themselves out of there mess without any government assistance/interference. Bailing GM out implicitly assumes they will go bankrupt and removes the pressures to reform themselves.
Rational arguments for bailing GM out
- Should GM go bankrupt, it will cost the US government a lot of money. GM has "only" 266,000 employees, most in the US. They have a lot more indirect employees in the companies that supply GM parts. The US government will have to shell out a lot of money in terms of unemployment compensation should GM go bankrupt. Many of those 266,000+ employees will not find jobs for a long time.
- The costs of paying 266,000+ people unemployment compensation pales in comparison to the payments the US government would have to make to GMs retirees should GM go bankrupt. While unemployment compensation stops after a short time, pension payments do not stop. GM has 450,000 retirees , and their pensions are backed by the Pension Benefit Guaranty Corporation in the case of bankruptcy.
- Those 266,000+ employees pay income taxes. A good chunk of that income stream will be lost forever should GM go bankrupt.
- GM stockholders will have a one year claim of massive capital gains losses. The wealthiest people in this country represent the lion's share of the federal government's total receipts, and these people will legitimately pay very little tax for the tax year in which GM goes bust. The timing of this event couldn't be much worse.
- The baby boomers, many of whom are about to retire, will not have enough work years left to recover from the shock a GM bankruptcy will inflict on their retirement accounts. Many of these people will thusly need government assistance in later years, and they will not need this assistance if GM remains a viable entity.
I am rational. They have ugly cars that suck. What do I care, let them go under! Design better cars so more people buy them. When I think of 'good car' I don't think of anything GM.
They waste resources with the junk they put on our roads.
Lets put it this way, what is GM doing, or planning on doing so that they DONT go broke? What innovative technology do they offer to bring to the table to make me spend my tax money bailing them out? Are they going to still make big SUV's that look ugly? What reason do I have to bail them out.