Bankruptcy is Better than Bailout

Discussion in 'Politics' started by Dragoon68, Dec 3, 2008.

  1. Dragoon68

    Dragoon68
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    Ahead of Hearings, Some Lawmakers Back Bankruptcy for Big Three

    At least are few are getting the correct idea that the option of letting these companies face bankruptcy would be much better than funding a bailout.

    Meanwhile what's happening to the $700 Billion bank bailout?


    Audit of $700B Financial Sector Bailout Fuels Criticisms of Paulson, Bernanke

    Why, of course, rumors of mismanagement already!


    Why on earth does anyone even entertain passing the plate for even more money?

    The government can't manage its own business much less private enterprises.
     
  2. Bible-boy

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    All one has to do is recall the House Banking Scandle. Our own elected officials were writing and bouncing bad checks drawn on the House Bank, and we the taxpayers had to cover their mismanagement of our money!
     
  3. Jim1999

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    Have you measured the cost of bankruptcy? Easily 500,000 jobs in Canada alone! Then there are pension funds allocation. Losses to those holding loans. Sale of properties to pay back those in line for such repayment. Bankruptcy means no more GM, Chrysler or Ford. They just will not start up again.

    I don't know and neither does the government at this point in time.

    Cheers,

    Jim
     
  4. KenH

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    And 3,000,000 jobs lost in the United States. I love my country too much to support such an action that would result in this when it can be prevented. Anyway, the auto companies are not asking for a bailout but for loans.
     
  5. Revmitchell

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    Bankruptcy does not mean the loss of one single job. It could happen but it is not a given.
     
  6. LeBuick

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    I believe a pre=packaged chpt 11 can be done and job loss can be minimized. Jim is right about the pensions, they will take a beating along with that job bank that continues to pay laid off workers 95% of their base pay. That massive healthcare program UAW was having them pay into will also bite the dust.

    Suppliers will need to be paid which should minimize downstream job loss and I hope the bailout money will be directed this way first.

    GM business model will work if they sold something like 14 to 16 Mil cars. However, they will only sell about 10 Mil this year. Bad business model if it doesn't adjust itself to current sales.
     
  7. Jim1999

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    Rev. Do you know bankruptcy laws? I know some of them in Canada with my wife as an accountant and handled a few of them, but I certainly am not an expert.

    In Canada under bankruptcy the jobs and the factories wold be gone. The jobs lost are more than the car company employees, but all the people working for companies that supply the auto field. Our government has already realized this fiasco will bankrupt the city of Windsor and the city of Oshawa will virtually shut down, as it does when GM goes on strike.

    I don't think they qualify for your Chapter 11.....they have no means to support pay back.

    I don't know, but I am troubled about it.

    Cheers,

    Jim
     
  8. Dragoon68

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    You're estimate is growing rapidly!

    Bankruptcy does not lead to permanent unemployment. People adjust to new jobs and new opportunities.

    We could, on the other hand, all work for the government and have a job for life couldn't we?
     
  9. KenH

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    I wonder if it was your job on the line if you would be so cavalier about it.
     
  10. Dragoon68

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    There's a market for automobiles. People want them. There's a need to make automobiles.

    There are people who know how to make them. There are people who want to make money doing that. There people who will supply them.

    It's a match!

    We don't need to worry about the bankruptcy of the big three because someone will pick up the challenge to supply the need.

    Those people, with money to invest in the business, will need workers. They'll even consider acquiring the better facilities of the big three. They'll avoid Detroit with its over priced union workers and corrupt politics. They'll zero on better locations like Spring Hill. They'll own the jobs.

    People that know how to build them, have experience and skills, and are willing to work will have jobs. They'll own the skills.

    It's another match!

    Those that loose "their" jobs - they weren't entitled to for life because they don't own it - will have to make some choices. They may have to work harder or work for less or relocate some place else or get some training in another field or all of these things. They may not be able to continue being home ice delivery men now that everyone has a home refrigerator.

    This "change" has been going on since for the history of man and people manage to adapt and prosper anew.
     
  11. Dragoon68

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    How do you know that I've not experienced such a thing in my life time?

    Cavalier is more like the definition of one who assumes it's the responsibility of government to take money earned by some to pay for the poor management of others thinking it will manically solve all the problems rather than just prolong the pain, create an incentive for more, and make it worse for all.
     
    #11 Dragoon68, Dec 3, 2008
    Last edited by a moderator: Dec 3, 2008
  12. Jim1999

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    Can you even imagine 10,000 men waiting in line for one job dealing out hamburgers at McDonald's?

    That's about what it would be with bankruptcy!

    We are not talking about Joe's Meat Packers going bankrupt here.

    Cheers,

    Jim
     
  13. KenH

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  14. Dragoon68

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    Bankruptcy is reorganization under the supervision of the court. It is designed to provide a fair disposition to a difficult problem. There will be losers. There are no winners. But, in many cases company's recover from bankruptcy and return to prosperity. There may be some layoffs but not necessarily. Someone is still going to be needed to build cars so long as there's a market for them. A bailout costs the taxpayers. Bankruptcy costs the creditors, investors, owners, managers, workers, and unions of the business involved. It puts the responsibility where it belongs. A bailout transfers the responsibility to others and rewards the poor performance that led to the need for it. It also penalizes other companies who've performed well in the industry and do not need a bailout. Not providing a bailout keeps the incentive high to do right.
     
  15. Dragoon68

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    There's plenty of work to be done. If the line gets that long they'll need to go to another town and find a shorter line.

    Can you even imagine 300,000,000 people waiting in line for a government handout because none of them want to accept responsibility for their own finances?

    We're talking about the future of America!
     
  16. tinytim

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    If there is a bailout, the big three should be made to start producing more hybrids...

    Why are liberals afraid of pure capitalism?

    If something isn't working it should be allowed to fail... that is good common sense...

    Let the big 3 fail, but be ready to put the money into other companies that are working.
     
  17. Jim1999

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    During the 30's men took full responsibility for their finances. There were no finances. There were no jobs. Men rode the rails to get from place to place. Many worked on farms for a meal.

    In England we had ration books and were very limited. There were no government handouts in those days in either country.

    Picture a town of 100,000 and 10,000 jobs in the GM plant alone out of work. IN Canada, we don't have the factories across the country to hire those men alone, let alone all the plants that will be shut down and the supply companies staff......My imagination is not that great to even visualize it.

    I do remember the 30's and the 40's and almost begging for food in London, England. Don't care to see it again.

    Cheers,

    Jim
     
  18. Dragoon68

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    The article states "... Details on the plan remain sketchy ..." and it sure seems so to me.

    It sounds like another government plan to move money around an make every one think they're getting a really good deal.

    It could, for example and in speculation, mean the government "buying" an 9% mortgage from Fannie Mae - spelled government in disguise - and "selling" a 4.5% mortgage back to someone. Where's the rest of the money?

    If not this it's most likely something equally troublesome.

    Money should not be loaned for less than it's worth! Ultimately it is not! Someone somewhere some time covers it!
     
  19. Dragoon68

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    Times were difficult but people did survive. People lost jobs. People were rationed. People lived lean. But, in time, people did find work, business did recover, people did start over, and people recovered and prospered. People also were much more thankful for they did have.

    If a town is built around one industry and it shuts down then the town is dead. Having the government keep it alive is unfair to the rest that are making on their on.

    Every state in the union is littered with places that once thrived but now are ghost towns some without trace. Gone are the lumber mills once the land was logged out. Gone are the cotton plantations. Gone are the coal mines. Gold mines played out. Times change and needs change. Then came the oil fields. Then came the electronics assembly plants. New towns developed in new places. People moved to where their skills were needed and did what had to be done. Did we owe all those ghost towns and their citizens jobs for a life time? No! Neither do we owe it to Detroit, or to the UAW, or to the big three.
     
    #19 Dragoon68, Dec 3, 2008
    Last edited by a moderator: Dec 3, 2008
  20. Jim1999

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    I have nothing more to offer. There is no point.

    Cheers,

    Jim
     

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