Automotive "Bailouts" vs. Subsidies

[Tempest]

http://www.msnbc.msn.com/id/17803920/
Those bailouts worked out really well...

Subsidies are no different. Just look what they do for corn and ethanol. Those subsidies and bailouts don't come out of thin air. They are taken from productive people and given to people or groups that are not.

This is economically destructive. The money given to the auto companies should have been kept by the people that earned it. It would have produced real economic benefit.

 

[BeanCounter]

Originally Posted By: benjamming
Bean,

I am inclined to prefer subsidies if forced to choose, which we are. A bailout means a business has failed. A subsidy doesn't necessarily mean that the business has failed or would fail w/o the subsidy. Neither are OK with me b/c as you said, government isn't present to conduct business.


I agree with you and understand that point of view completely. Bottom line is that last sentence, and I think that is the important thing.

I suppose the only difference that will cause a variation of opinion is a business having failed and a business trying to grow, with a bailout and a subsidy, effectively. But counter intuitively, the bailout can bring in money (in the form of interest and debt repayment) quicker than than subsidies do, which can take 5-10+ years, depending on the situation of course. This is the perspective that drew me a bit away from your opinion, but again, I still feel partially inclined to empathized with your opinion as well.

Nice post.

 

[BeanCounter]

Originally Posted By: Tempest
http://www.msnbc.msn.com/id/17803920/
Those bailouts worked out really well...

Subsidies are no different. Just look what they do for corn and ethanol. Those subsidies and bailouts don't come out of thin air. They are taken from productive people and given to people or groups that are not.

This is economically destructive. The money given to the auto companies should have been kept by the people that earned it. It would have produced real economic benefit.


You're right, a lot of subsidies are very detrimental to the source of those tax dollars. It would be hard for me to feel any different about them than how you just classified them.
Excellent point.