Bailouts

keepit wrote:
Bailouts are being discussed as a result of the virus' effects. The govt will take an ownership position as they did during the last crisis. Correct me if i'm wrong but isn't govt ownership of too much a socialist thing.
Keep in mind that the fed made a big profit the last time this happened.

keepit wrote:
Bailouts are being discussed as a result of the virus' effects. The govt will take an ownership position as they did during the last crisis. Correct me if i'm wrong but isn't govt ownership of too much a socialist thing.
Keep in mind that the fed made a big profit the last time this happened.

keepit wrote: I don't get the difference between govt ownership and state ownership. I wouldn't want to lose boeing though.

keepit wrote:
Sorry IBDM but it sounds like word play to me. Better known as semantics.

keepit wrote:
I don't get the difference between govt ownership and state ownership.
I wouldn't want to lose boeing though.

James wrote:
GM was one example of this. With large corporations, if they don't have the financial reserves, why? It would suggest to me that those companies have poor fiscal management. Basically they rely on being over extended as a part of their business model.

James wrote:
In the US, the private sector that has rights to those resources gets rich instead.

GasGuzzler wrote:

James wrote:
GM was one example of this. With large corporations, if they don't have the financial reserves, why? It would suggest to me that those companies have poor fiscal management. Basically they rely on being over extended as a part of their business model.

Could it be they have been forced into building and selling vehicles that people don't want through ridiculous fuel/fleet standards?

James wrote:
In the US, the private sector that has rights to those resources gets rich instead.

Who knew? All I had to do was buy land with oil under the surface and I would have been filthy rich!

Could it be they have been forced into building and selling vehicles that people don't want through ridiculous fuel/fleet standards?

HarveyH55 wrote:
I don't believe in bailouts. Bankruptcy shouldn't be so forgiving either. Companies don't need to be fiscally responsible, if there is very little chance of losing, when they gamble. Greedy companies should fail, and fall. It opens up room for other businesses to grow, and take their place. A growing business, is most likely to make better products, provide better service, and at the most reasonable price. They need to grow, build a positive reputation.

Into the Night wrote:

HarveyH55 wrote:
I don't believe in bailouts. Bankruptcy shouldn't be so forgiving either. Companies don't need to be fiscally responsible, if there is very little chance of losing, when they gamble. Greedy companies should fail, and fall. It opens up room for other businesses to grow, and take their place. A growing business, is most likely to make better products, provide better service, and at the most reasonable price. They need to grow, build a positive reputation.

Bankruptcy isn't an easy process. Companies lose a lot when they file for it. Bankruptcy laws exist to organize how debtors are going to get paid with what's left, some debtors are discharged without pay (usually due to usury), company leaders often are forced to step down, stockholders lose some or all of their investments and may sue the company leaders, etc.

Certain debts can't be discharged, such as lawsuit judgements against you, etc.

They company may even be sold to another buyer that will turn the thing around and make a profit with it where the previous company leaders failed.

The purpose of bankruptcy laws to organize the disaster and provide a path for the company to possibly be productive again under new leadership.

In China, there are no bankruptcy laws. A debtor that can't pay his debts is dealt with by the loaner's 'enforcers'. They will get their pound of flesh one way or another. There is no chance for a buyer to restructure things to a productive path again.

Bankruptcy laws were written into the Constitution of the United States for a reason. At the time, debtors in the UK went to prison and rotted there, and the companies completely dissolved, with no chance for recovery under competent leadership. It was brutal, and people died in debtors prison. To avoid this, people would flee to other countries, to get as far away from the law as possible. This is a big factor in why Nassau became home to so many pirates. They became criminals to avoid debtors prison.



With all that said, when a government tries to interfere with the economy to try to save what it deems are 'necessary' businesses, they are picking and choosing which companies are allowed to exist. This is fascism. Instead of the bailouts for 'companies too big to fail', these unproductive companies should have been allowed to fail, enter bankruptcy, and be sold to productive leaders. This removes incompetent leaders and replaces them with more competent ones.

What the bailouts did is prevent this natural process, leaving incompetent leaders of these companies not only at the helm, but now protected by the government. This is one of the reasons why fascism is wrong.

keepit wrote:
Back in the financial crisis of 2007,8,9 the Fed and the Treasury participated in the bailout. The Fed actually made a profit when they got paid back. I was all a pretty good idea except i thought some people should have gone to jail for fraud.

Into the Night wrote:

HarveyH55 wrote:
I don't believe in bailouts. Bankruptcy shouldn't be so forgiving either. Companies don't need to be fiscally responsible, if there is very little chance of losing, when they gamble. Greedy companies should fail, and fall. It opens up room for other businesses to grow, and take their place. A growing business, is most likely to make better products, provide better service, and at the most reasonable price. They need to grow, build a positive reputation.

Bankruptcy isn't an easy process. Companies lose a lot when they file for it. Bankruptcy laws exist to organize how debtors are going to get paid with what's left, some debtors are discharged without pay (usually due to usury), company leaders often are forced to step down, stockholders lose some or all of their investments and may sue the company leaders, etc.

Certain debts can't be discharged, such as lawsuit judgements against you, etc.

They company may even be sold to another buyer that will turn the thing around and make a profit with it where the previous company leaders failed.

The purpose of bankruptcy laws to organize the disaster and provide a path for the company to possibly be productive again under new leadership.

In China, there are no bankruptcy laws. A debtor that can't pay his debts is dealt with by the loaner's 'enforcers'. They will get their pound of flesh one way or another. There is no chance for a buyer to restructure things to a productive path again.

Bankruptcy laws were written into the Constitution of the United States for a reason. At the time, debtors in the UK went to prison and rotted there, and the companies completely dissolved, with no chance for recovery under competent leadership. It was brutal, and people died in debtors prison. To avoid this, people would flee to other countries, to get as far away from the law as possible. This is a big factor in why Nassau became home to so many pirates. They became criminals to avoid debtors prison.



With all that said, when a government tries to interfere with the economy to try to save what it deems are 'necessary' businesses, they are picking and choosing which companies are allowed to exist. This is fascism. Instead of the bailouts for 'companies too big to fail', these unproductive companies should have been allowed to fail, enter bankruptcy, and be sold to productive leaders. This removes incompetent leaders and replaces them with more competent ones.

What the bailouts did is prevent this natural process, leaving incompetent leaders of these companies not only at the helm, but now protected by the government. This is one of the reasons why fascism is wrong.

keepit wrote:
Back in the financial crisis of 2007,8,9 the Fed and the Treasury participated in the bailout. The Fed actually made a profit when they got paid back. I was all a pretty good idea except i thought some people should have gone to jail for fraud.

keepit wrote: Am i the only one here that knows the fed makes a profit?

keepit wrote:
Am i the only one here that knows the fed makes a profit?

keepit wrote:
Read about it in wikipedia ITN.

keepit wrote: IBD, Do you think the fed often makes a profit? Come on IBD, be real, give a real answer.

keepit wrote: The fed makes digital money out of nothing and sends it to the banks. The banks later pay it back.

keepit wrote:
The fed makes digital money out of nothing and sends it to the banks. The banks later pay it back.