Two additional elements of the economy are now calling for fed help and/or bailout money. They include the auto manufacturers and some public transit agencies. The remaining 3 Detroit based auto manufacturers are asking for bailouts. The auto industry has stalled. The companies are burning through cash like its going out of style; billions of dollars each month. Dems are of the opinion to bailout the auto industry. It is one of the last large bastions of American manufacturing. The industry is huge and employs millions. The industry as a whole is suffering big time, as car sales are down around the world, credit for cars is tighter than in the past. Other national auto industries are also hurting. Of course bankruptcy for the large manufacturers is an option. Some Public transit agencies face a form of forced technical bankruptcy or immensely hard times. Through the early part of this decade public agencies often sold then leased back capital equipment such as rail cars from financial companies. It was a form of tax based financing. The transit agencies couldn't use depreciation. They would sell off the capital equipment for lower cost acquistion/leasing rates as the financing companies could factor in the depreciation they would get. All those deals were guaranteed by AIG, the insurance company that received a bailout. On a technical basis the loan agreements depended on AIG. The loan agreements have been violated. Even tho the payments are being made, some of the financial firms holding the ownership of the capital equipment is demanding payment, due to AIG's failure. Its a technical argument. The transit agencies have gone to the Feds to ask for cash, guarantees, or other help. What, in your opinion should be done on the two cases above?
There is no way everyone can be bailed out. If one business is bailed out, every other business will ask for a bailout. Even small businesses will demand government assistance. Banks and other financial institutions were exceptions. These are the lifeline of the economy. Moreover, banks and financial institutions are all interlinked and a failure of a few could have meant an economic catastrophe. Thus, it was necessary to keep them afloat. Looking at the debt position of the US government, I don't see any option for the government, but to let the economy take its own course.