There aren’t Apparently any Cons of Bailout, but is That Really the Case?

We are told about the state of the economy almost every day.

Lots of news reports continually tell us that lots of companies are starting to struggle in these uncertain times.

On TV and in newspapers there are often stories about companies closing and it seems that even some very well known companies are having difficulties.

The media paints a very rosy picture showing us exactly why bailouts are required to save these businesses.Trouble is that these reports are often one sided and few people are ever aware of any cons of bailout.

There are actually a number of arguments against bailing out corporations especially since these are private businesses.

A private business is private by definition and it should not have anything to do with the government.

Private businesses are not like public services they exist to make a profit for their stakeholders rather than to provide a service.

Even after a bailout many of these companies bosses will take huge bonuses so why should the taxpayer have to sure up the business?

Surely these industry fat cats could cut back on their bonuses or even take a wage cut in order to help their business to survive, so why must a bailout payment be made to enable them to continue operating in the same way?

Could it be that the same people pushing for the public to support bailouts are the ones that are benefiting?

There should always be a risk when you’re in business, if there was no risk then everybody would start up their own businesses rather than sticking their money in a bank account.

All investments have a certain degree of risk, and at the moment investing in certain key industries seems pretty secure.

Cons of Bailout

Problems with Bailout Plans

One of the biggest problems with bailing out these corporate businesses is that it will only work in the short term.

Unless these businesses can recover quickly then regular bailout payments must be made to support the employees and make sure that they can keep their jobs.

This isn’t feasible and isn’t something that is going to happen, by making these bailout payments in most cases the government will simply be delaying the inevitable.

People will always buy things that they need, and the fall in demand in many of these industries is illustrating that something needs to be done. They need to create new products or develop new technologies.

If businesses are exposed to the harsh environment then they will be able to do everything they possibly can to survive.

They will restructure and fight for their lives. If on the other hand they are bailed out by the government any time then there is no reason for them to fight.

This is another important cons of bailout that few people ever consider.

Fighting

As children we are all told that we should fight our own battles, and that every action has a consequence.

Businesses have had it good up until now and they have given nothing back to the government but they are now expecting handouts.

Businesses really need to stand up on its own two feet and understand that everything they do has a consequence.

This is one of the biggest cons of bailout, that firms simply can’t support themselves.