How to End Economic Bailouts

Americans have seen the anguish of giving trillions of dollars to the private sector to keep the industry running. Many were outraged by the tax money that was given to companies like AIG, and was later enlightened the company spent the tax dollars on frivolous things such as CEO bonuses. Nevertheless, the bailouts were necessary for America’s economic fundamentals; without government intervention America would be facing a fiscal disaster that would soon transcend to the global economy. Most economists agreed that the private sector bailouts were essential, but is there a way to end economic bailouts and secure a healthy private sector? Yes, there is a better way.

There is no debate that the bailouts that the American federal government fashioned kept the country afloat. So when American citizens cry in outrage, “Where is my bailout?” they are ignorant to the fact that this was a bailout to secure not only private business but the citizens as well. There is a strong connection between the people and the private sector in capitalism – they secure each realm’s fate economically. The bailout is a perfect example of when the fates of businesses and the consumers are cohesive; the people (or the government) aided the fatal private sector and in result was rewarded with some more economic security. The economic fate of everyone is determined by the relationship of people and businesses.

That is how bailouts can end; by changing the business and people relationship to ensure economic security. The reason why the businesses needed a bailout was because they were too big to fail. When a company becomes massive in size and revenue, they become an asset to the economy and the people. The large businesses are care givers to the people – they supply employment, salaries, and benefits. Then when the large businesses begin to fail, the people become the care givers with government bailouts that exceed trillions of dollars. This type of a relationship makes the two realms bitter and unable to regain trust.

The bailouts given to large industries would not be necessary if the companies were not massive to begin with. Keeping businesses smaller would ensure that bailouts that take away the tax payer’s money would cease to exist. Why? Because now those businesses aren’t so large anymore, and, therefore, they are not such an asset to the economy anymore. Large businesses have a vast amount of employees; when the large businesses begin to fall the people risk having more unemployment which would result in less money being ejected into the economy, so it’s only logical to keep those businesses floating with bailouts to secure their future. If the economy was only filled with small businesses there would be less detriment on the people because there is only an acute amount of employees. If one small business collapses, the amount of unemployment would not be as high as the large businesses that would go under.