Bankruptcy Is Good For The Economy

Discussion in 'Economy' started by garyganu, May 20, 2012.

  1. garyganu
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    garyganu Member

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    Bankruptcies are necessary to weed out uncompeititive, overpriced, inferior products and make room for new lean, robust, thriving competition. When a company goes out of business, it creates a vacuum that will be filled by competitors, new start-up companies or new innovation that will change or modernize the entire industry. Similarly a forest must endure forest fires to remove the dead wood, disease and overcrowding in the woods in order to give new healthy saplings space, opportunity and nutrients to thrive and prosper. Nature abhors a vacuum.

    Although people will lose jobs due to the bankruptcy, new opportunities will be created that will fill the economic vacuum that the bankruptcy created. Bankruptcies are good and necessary for a thriving economy.

    Conversely, bail-outs are harmful to the economy. The federal bail-outs of the financial and automotive industries will only lead to less competition, higher prices, lower quality, more corruption and less innovative goods and services.
     
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    Last edited: May 20, 2012
  2. Sallow
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    Sallow The Big Bad Wolf. Supporting Member

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    Ah ye olde "Creative Destruction" argument.

    Moving our manufacturing, mining, technical and agriculture businesses overseas is bad for the economy.

    :thup: True story.
     
  3. Leweman
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    Leweman Gold Member

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    agreed yet no party tries to stop it.
     
  4. garyganu
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    garyganu Member

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    Government bail-outs and foreign competition are two separate issues.
     
  5. Sallow
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    Sallow The Big Bad Wolf. Supporting Member

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    Well not exactly..

    After watching some 50K factories close up during his 2 administrations, Bush had a stroke of Lucidity in his final few months and cobbled together TARP and the auto industry bailouts. Thankfully Obama followed through on both..and manufacturing in this country is slowly..and I mean slowly..coming back.

    Hopefully..that continues.

    Wealth is generating by building things, mining things, growing things..and providing information about things.

    We shouldn't forget that.
     
  6. Sallow
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    Sallow The Big Bad Wolf. Supporting Member

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    :lol:
     
  7. Mr Clean
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    Mr Clean Gold Member

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    That's exactly right!

    Not doing those things and we stand a real good chance of ending up like Greece.
     
  8. garyganu
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    garyganu Member

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    There are 2 million less jobs in today's work force than there were 3 years ago. America's workforce is 87 million. This is the lowest level since the 1980's and it is still shrinking. The only reason that the unemployment numbers are coming down is because there are less jobs available and people have given up looking for work..
     
  9. Mr Clean
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    How many of those jobs were lost to cheap foreign labor?
     
  10. garyganu
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    garyganu Member

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    This is a completely different topic, but I will address it if you insist.

    We are less competitive because of excessive taxes and regulations. Some regulations are good and necessary but many are excessive.

    It is unfair to have American companies compete with foreign companies, without tariffs and regulations on imports to level the playing field. Without tariffs and regulations on foreign imports, America's manufacturing base will continue to erode. Our nation must produce as much as we consume in order to sustain our safe and comfortable style of living in an unstable world economy and for reasons of national security.

    Without imposing tariffs and regulations on foreign imports, American manufacturers can not compete with foreign imports. This will result in a decrease of the US manufacturing base, and an increase on dependence on foreign goods.

    I will list some of the major expenses and regulations that our government places on American business. These expenses and regulations grossly increase our cost of doing business as compared to foreign companies from China, Mexico and many other major trading partners.

    1) The US places regulations on child labor in the work force.

    2) The US places regulations on minimum hourly wages and overtime.

    3) The US requires that companies pay for and provide, Workman's Compensation insurance and unemployment insurance. Workers and companies also share the cost of Social Security and Medicare for all US workers.

    4) US companies are strictly regulated to prevent them from dumping waste in waterways, in the air and in unregulated landfills. As a result, eco-friendly waste disposal has become a major expense for US businesses.

    5) US companies must comply with strict OSHA (Occupational Safety and Health Administration) regulations, which protect workers from unsafe working conditions in factories, mines, and other businesses.

    6) Us companies face product safety regulations which, among other things, prevent them from using lead based paint in children's toys or producing tires that are likely to blow out and cause crashes.

    7) US food companies are strictly regulated for food safety.

    8) US drug companies are required to have costly testing and trials. They must get FDA (Food and Drug Administration) approval before being allowed to put new medications on the market.

    9) Factories, commercial buildings, homes, bridges and highways face stringent building code regulations. These regulations are intended to reduce collapses, fires, accidents and hazardous conditions. Also these regulations help buildings, bridges and roads stand up to hurricanes earthquakes and other natural disasters. US structures are among the safest in the world.

    10) US auto manufactures face strict safety and environmental regulations to make sure that vehicles on American highways are as safe and pollution-free as possible. The US boasts safer and cleaner vehicles than most of the rest of the world.

    These are just some of the US regulations that I can think of off the top of my head. Although many of these regulations go too far, and some may not be effective enough, for the most part these costly regulations on US business and infrastructure, help America to produce the safest products, under the safest, cleanest and most humane conditions. This is done in a manner that keeps American waterways, air and land, cleaner and healthier than most other nations of the world.

    There are only two options that can level the playing field when competing with foreign businesses. The first would be to remove the regulations that I listed above, thus bringing down the cost of doing business in the US. The second option would be to place tariffs on foreign imports.

    It would be a step back into the dark ages, to reduce or eliminate many of the regulations that have protected American workers and consumers in our modern era.

    We can not control the way foreign countries choose to regulate their businesses. It is clear to me, that there is only one way to level the playing field, when competing with foreign businesses. It is to place tariffs and regulations on foreign imports, so that US industries can compete with them, while still maintaining our high American standards.
     

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