As worries about possible bank failures have intensified, the Obama administration is working on creating a plan that would give the government ownership of some banks without scaring away private investors. In order to restore confidence in the financial markets and to jump start lending, the Treasury said it would buy preferred shares of stock in the U.S. banks, savings and loans. The plan promises shares that taxpayers will own will be paid back with an alleged "reasonable return". The hope is that this will create an incentive for banks to remove themselves from the plan or the government will take a larger portion of the returns. The Treasury Department insists that banks that participate will have to abide by rules which prohibit large golden parachutes to corporate executives when the tax payers money is at risk.
This is an extremely important issue to consider especially since our generation will be paying the deficit that is created during this administration. Do you think this 'bank bailout' will be effective? And if not, what options do we have as citizens to stop these kinds of decisions from being made in Washington?
This clip from Fox News is extremely informative and outlines ways in which our tax money may be spent on this plan.
I'm completely against the government owning, controlling and regulating these banks. These are private businesses and should remain that way. In a free market society, a business that can't compete will fail. I see no point in our government trying to save these failing big businesses, when smaller businesses don't receive this kind of favoritism. This is another example of our government sticking their noses between free market ideology, ultimately disintegrating any possibility for small businesses to compete within these market. Continuing to treat our economy like this will result in businesses having monopolies on every product, possibly even having those monopolies merge and conglomerate, until business and commerce is owned and controlled by the very few and powerful.
Obviously we have had issues already with bailouts failing- in the case of GM. It is scary to think we are giving all this money to the same people again, and think that they are going to make changes. I hate to say I do not have a lot of faith there, but I don't.
If the government does decide to bail out these banks because of the huge consequences that happen if they fail, they better regulate this better than the motor company crisis.
The national debt clock is going up in numbers. They aren't going to pay all that back in my lifetime that's for sure. In fact, the clock is running out of space for our debt.
Here's a link if you would like to read about the clock:
I'm completely against the government owning, controlling and regulating these banks. These are private businesses and should remain that way. In a free market society, a business that can't compete will fail. I see no point in our government trying to save these failing big businesses, when smaller businesses don't receive this kind of favoritism. This is another example of our government sticking their noses between free market ideology, ultimately disintegrating any possibility for small businesses to compete within these market. Continuing to treat our economy like this will result in businesses having monopolies on every product, possibly even having those monopolies merge and conglomerate, until business and commerce is owned and controlled by the very few and powerful.
ReplyDeleteHow many times can we bail people out?
ReplyDeleteObviously we have had issues already with bailouts failing- in the case of GM. It is scary to think we are giving all this money to the same people again, and think that they are going to make changes. I hate to say I do not have a lot of faith there, but I don't.
If the government does decide to bail out these banks because of the huge consequences that happen if they fail, they better regulate this better than the motor company crisis.
The national debt clock is going up in numbers. They aren't going to pay all that back in my lifetime that's for sure. In fact, the clock is running out of space for our debt.
Here's a link if you would like to read about the clock:
http://www.usnews.com/blogs/new-money/2008/10/09/maxing-out-the-national-debt-clock.html