Bailouts: Should We Have Done Them?

In recent months, the economy both of the United States and of the world has fallen on hard times. On December 1st, that became official when the National Bureau of Economic Research declared that the US was officially in a recession. While a recession is more widely defined as when the GDP falls for more than 2 financial quarters in a row, this declaration simply affirmed what the economy was already suffering from. Financial analysts predict that this recession will be rather long, dragging on for up to a decade, and consumers are generally pessimistic, with the stock market dropping rather steeply.

However, the big question came when it was clear that many of the banking firms on Wall Street would not survive without intervention, possibly causing the losses of many people’s investments and funds, so a bill was written up to bail them out using taxpayer funds. This was evenutally passed, and though several hundred billion dollars were written out as checks to these banking firms, no noticeable improvement in the economy was noticed, leaving many people wondering if we should have bailed out these firms in the first place.

The market economy that exists in the United States works largely on the concept that the government should not intervene. Prices are determined by supply and demand, and if a company goes bankrupt, it absorbs its losses, not the general public.

So should we continue to bail out companies who cannot keep up with the economy, simply to save jobs? I say that we should not. The government does not have the right to redistribute our hard-earned money in the form of taxes and bailout checks, and if a company should fall under, then it should simply fail. 9/10 of startup companies fail in the first year, and business is not forgiving. Such is life, and we should not attempt to regulate these things. Success is success, and it is earned, rather than given.