Wednesday, July 1, 2015

I have often told people part of the problem causing this depression we are in, is because of the bailouts from 2008 and 2009.

If we look at history, in 1989 Poland went through economic reforms. Many of their factories were not turned over to private ownership for fear of shutting down if they had to compete in a free market. It would have been better to permit them to go out of business. Thane this concept:

Businesses are in business to make money. If they can not make money, they should either change what they are doing in order to make money, or close the business and allow successful businesses to cover their market.

Any business man and woman can tell you a business is in business to make money. This is what businesses exist for: to make money. It is absurd to ruin the economy by subsidizing an enterprise that is economically unviable.

A case in point. In America, the businesses that could not make money and remained in business with the help of the government STILL had to 'lay off' their employees to stop the bleeding of money. These employees were under the impression their jobs would be waiting for them. Until then the employees lost everything they saved for, because they were not looking for work. As a result they ended up having to go on government unemployment assistance. Many employees never got their jobs back.

It would have been better if the company were to go out of business, therefore, letting the employees know they need to be looking for work, than having them hold onto false hope their jobs would still be there for them.

As a result, unemployment went above 30%, which is higher than the unemployment rate of the great depression of the 1930's and 1940's. The government, in a vain hope to make things look better than they really are, only report new claims of unemployment. These numbers never take into account those who continue to be unemployed for more than a month.

In 2000, the government bailed out one company and two months latter the unemployment went above 6%. You may not think that is so bad, but if you look at the historical records, you will find that since the end of the great depression, unemployment never reached 6%. It was only after this one company bailout did it go so high. So in 2008 & 2009, many failing companies received a bailout.

The results; well we are still suffering those results.

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