Should the government be the employer of last resort?
After a careful reading of Chapter 24 and New View 24.1, please respond to the following:
In the most recent recession, the federal government bailed out banks and auto companies and left many unemployed individuals asking "where's my bailout?" In the Great Depression, the government created the Works Projects Administration (WPA), the Civilian Conservation Corps and the Public Works Administration with the intent to provide at least temporary employment opportunities for those unemployed. Some of these projects provided much needed new infrastructure. At what point should the federal government intervene in the economy (if at all) and create similar jobs? If they do, what projects would generate the greatest long-term economic growth?
Argh! The dumb system just erased my huge comment! An attempt to repeat it: It's hard to know at what point the government should step in and bail out institutions and who exactly should be bailed out. While many of the fat cat perpetrators of our recent financial meltdown unfortunately profited from the bailouts, what of the workaday employees at those firms whose jobs were saved, and thereby their communities? Many of those of us on the lower economic rungs don't have time to wait for the market to fix itself. Having a job becomes a matter of survival, hence govt. intervention becomes necessary. Whether that actually harms the economy in the long run is difficult to say, but I do love the National Parks, and systems like the WPA and TVA, besides making the country more aesthetically pleasing, seem to have provided good opportunities for continued growth as its projects were expanded (esp. as far as upkeep) and created valuable infrastructure necessary for continued growth. And if they are examples of "creeping socialism," big deal; capitalism as now practiced could use a dose of heart and conscience, concepts that should not be separated from economic theorizing or practice.
ReplyDeleteI think a "bail out" is a bad idea all the way around. Just giving free money away doesnt provide any long term solution and futhers our debt in my opinion. For exmple many Americans have discovered that they can make enough money to get by collection unemployment, therefore there is no motivation to get a job. Free money just makes us lazy. I am for the goverment creating jobs so long as those jobs go twords some kind of equatable long term infrustructure or revenue generation project like dams, power plants, toll roads, national securrity, etc.
ReplyDeleteThe government should not intervene on the economy. The economy should work itself out and if it happens to be in a bad cycle they it should find a way to dig itself out of the bad cycle and return to normal or above. The government should create jobs that bring in revenue instead of giving free money away, which creates the economy into a deeper debt than before. The jobs created in National Forest, toll roads, HOV lanes use for single rider, security for state and national, Power plants, Nuclear plants, dams, and many more other that will generate revenue for the government so it can help the economy out
ReplyDeleteI don't mind the government creating jobs, as long as the jobs actually have a purpose in the economy. If the jobs are made just to fill a void then they aren't effective, because it won't help people learn to work, or become able to support themselves and their families.
ReplyDeleteBailouts are a bad idea no matter what the situation is. If a business is failing then it is the result of bad management, or everyone else is having equal trouble. Either way, the money that would be given tends to prolong the problem rather than solve it.
Generally, I would say, no, the government should not be the employer of last resort. However, I am willing to accept that the 1930's Great Depression was an exceptional situation and may it was OK for the government to temporarily be involved in valuable and large infrastructure projects such as the Hoover Dam which added value to our economy. I don't think that our current 8.8% unemployment comes even remotely close to the 25% unemployment of the Great Depression, and since government generally is a poor substitute for business, I don't think that now is a good time for government waste to interfere with the economy with our tax dollars. I don't know what point the government should get involved, perhaps if the unemployment were over 15% for at least 18 months, than the government may consider getting involved perhaps. Perhaps the government could fix roads, bridges, Rail Roads, airports and sea ports or build a fence on any border where many foreign criminals are crossing over, or even hiring more teachers to retrain workers either at community colleges or night school adult ed. situations.
ReplyDeleteGary
Enabling is always a bad idea. Service-giving of your OWN (not everyone else's) time and recourses to another in need-is beautiful, and much more is needed in America, it is our capitalistic system's missing link right now. The word bail out just has a bad ring, but thats what the liberals are all about. They are always trying to act like the good people that want to make everything alright, but they don't go about it in a sensible and realistic way. No offence, but I think the Oboma administration has not made a whole lot of sense in recent actions, such as bail outs, to help our current economic crisis. We as citizens need to fulfill our responsibility as citizens and serve our fellow man, make some sacrifice and give of what we have been blessed with to do just that. We are the richest country in the world and have all the money and recourses we need to fix this problem if we would just stop being so selfish. Go out and do some service. My God bless us with charity in our hearts.
ReplyDeleteI think that the government shouldn’t bail out the economy, because the economy should work itself out, and bailing out banks just keeps banks that are unstable in practice. However I think that the government should intervene for working class citizens who lose their jobs, because the economy’s failure was not their fault, and if people have jobs, they can put money into their local economy.
ReplyDelete-Jessica Gruendell
It seems very baffling to consider the “bail-out” concept. In a standard circumstance, if a particular business is failing, the normal practice would be for it to cease surviving. Government intervention is in reality government deciding who “WE” (the taxpayers) will rescue. As we have reviewed in chapter 23, the government is not omniscient; therefore, cannot be regarded the superlative option for these bail-outs. More than likely, the choices are politically driven. The taxpaying public will hear moral justification for the government choices; however, the decision to bail-out remains political.
ReplyDeleteAs far as creating temporary jobs, it would be in the best interest to continue cultivating capitalism by commissioning the top managed private sector firms to oversee these projects and NOT government agencies.
Thomas Sowell, in his book, Basic Economics utilizes the Soviet Union as an ideal example of how government agencies are notoriously mismanaged as well as micro-managed.
All this is done for “the good of the taxpayer”; while we sit passively by and our national debt balloons to a catastrophic level.
Either we ARE a nation steeped in the belief of capitalism; or on the path to transforming our economy and our nation.
If we are capitalist then we should remain true to that financial structure; otherwise we are in serious danger of deteriorating into “clandestine socialism.”
-Sandra Maki
Well honestly, I think the government should not stick their nose into the economy because we are able enough to work this out on our own. But with the job situation, its a good idea for them to help out those who really need the help finding jobs. With the job market crashing they should put more than one foot in the door to help create more jobs for those who really need one.
ReplyDeleteI believe the last resort tactic such as a bailout by the government was necessary to avoid an even greater economic crisis. It is my belief that the government should have implied regulations that would have restricted irresponsible trading and lending. Thousands of Americans would have gone bankrupt. The major banks such as; Goldman Sachs, Morgan Stanley, and Bank of America would have followed. The unemployment would have doubled. Basically the bailouts were the governments’ best solution to the financial crisis.
ReplyDeleteThe government should not make work for people. Nor should they cancel a project that would otherwise go through. They best thing that could help an economy is to spur innovation. Don't fund the big companies, fund startups and small companies with new ideas. The entrepreneur was who made US great, we should continue that. Not only can that generate jobs and work, but it will also continue to benefit after the downturn is over.
ReplyDeleteWhy must some companies be bailed out while others are simply left to be shut down. When massive corporations are failing as well as smaller ones why is it that we choose to the help the bigger ones? But, then again we didn't actually choose to bail anyone out. The government did. Sure they hold more jobs but it occurs to me that there is a bias towards the smaller and or local businesses that can be very discouraging for our future generations when it comes to innovating as opposed to following someone else's lead, someone who has been in control of power and money from the start.
ReplyDeleteBailouts aren’t a good idea and the government should be very careful in the ways it provides help and the types of jobs it opens because many will take advantage. It took me a while to post a comment because I couldn’t set my mind on one side of the issue. It’s easier for those of us that are not on the edge of surviving to be against bailouts but there are so many people in such desperate need ,victims of the bad economy and if I was sure that the governments interference would be so well thought through with good investments in researching which people actually deserve the help I would gladly support. However, it’s been more than once that I’ve seen at check outs people buying sodas, donuts, chocolates, energy drinks and best of all Naked juices which are each $4 for a small bottle, with food stamps. The jobs created by the government need to be helping the economy as well.
ReplyDeleteVeronika Dimitrova
In response to the question should the government provide a bailout for individuals I would say yes at certain economic times. Recently the recession was a good example of a time the government could have stepped in and bailed out several individuals saving several unemployment numbers. I don’t however think that the government should be allowed to pick and choose who they bail out (in the bank regards). With the economic times that the new deal helped to create jobs, I think that it was very beneficial to help create national parks and other historic land marks. I think that the government should intervene and create several new jobs when an economic down turn occurs. Projects such as helping in their community should be types of jobs that the government should employ for. I believe that to rebuild a country you have to get back to the fundamentals such as helping to beautify our country but also helping in each community in the United States. Bail out of individuals can help if carefully put in place. Definitely as a close to last resort as the unemployment numbers rise.
ReplyDelete-Trevor Smith
Bailouts for me a very touchy subject, case in point, in the late 70's GM went on strike and as a result Lee Iaccoca asked the feds for a bailout and got. Fast forward a few years and International Harvester (company my father worked for) went on strike, the company asked the feds for help and were denied any type of help. Hence the bad taste in my mouth on any type of federal bailout.
ReplyDeleteAs to the creation of jobs, if I recall correctly when the government passed the stimulus packages I saw some road work being done here in the valley with signs mentioning that this work is being funded by the package, so in essence we did or may still have created some temporary jobs albeit no where near as many as we need.
One of Obama's dreams is for everyone to have broadband in their home(kinds sounds like a chicken in every pot) I am all for that, it will give people jobs, everything from planning where to put the line to digging the holes. However in the long run will Joe Public be able to afford it, as we all know the telecoms will want to have first crack at the pricing, but I digress. Lets create jobs that will help rebuild the countries roadway bridges so that disasters that happened in Minnesota don't happen again, there is some long term work.
Is disagree with the bailouts, it is like covering up someone else mistake. the only thing you are causing to do it to prolong a fall for a big fall in the long term.
ReplyDeleteAs for the creation of jobs I definitely agree it as long as the government does it in form of investment not in a way trying to get out of problems because that is only a temporary fix
I think such programs are and have very well proven to be very helpfull, although i do not think it to be the governments responsibility to do such things as a bail out, I think that if they are going to do the bailout though that they should provide some sort of last resort employment. I think that the most economic gains can be gained from new projects like constructing buildings and then investing in ther use.
ReplyDelete