Bailouts or bankruptcies you choose.

[Liberalman]

Bailouts or bankruptcies you choose.

Sit down for I am about to say will blow your mind “The Taxpayer Is Responsible For This Economic Disaster”

I can only quote a master of the sales and motivational speaker Zig Zigler the taxpayer suffers from “Stinkin Thinkin”

In this free capitalistic society that we live in the taxpayer elects people to represent their interests in a government.

The taxpayer then tells the government what they want and the government does it.

The taxpayer put the money they have leftover into savings and companies to invest in.

Since bank savings accounts give the least money the taxpayer invests more into equities that have a higher return like banks and other industry sectors.

When the market crashes which the investment managers lightly mention as a market correction taxpayers lose their money the first place they turn to is the government and demand a bailout and most time the government decides against it but this time they listened to the taxpayer and bailed the financial institutions out.

I was watching CBC National where they brought in the high profile millionaires in the CBC’s Dragon’s Den and Buzz Hargrove the former boss of Canadian Auto Workers said when the big three were producing SUVs and mini vans that was what the public wanted at that time but because of the spike in gas prices last summer going up to $1.50 a litre all of a sudden the demand for small fuel efficient vehicles demand grew.

We have to remember that the auto industry made their money from sales and leases and when the credit dried up less people were able to qualify which meant disaster.

The taxpayers should learn from big businesses when they take over a business then they deal with that business by buying the products that they produce which increase their bottom line.

This means since taxpayer’s money is helping Canadian companies in startup and expansion then the taxpayers should buy from those companies.

The other options open to government is changing the bankruptcy laws or even get rid of bankruptcies altogether.

Bring out laws that lending industry must follow anybody which means person or business that gets into financial difficulties like no payments for 60 days must not have access to credit until the entire amount is paid off.

This would force them to live within their means.

The government should consider putting a law in regards to mortgages of a fixed term like a rent control type that means when the term is up the mortgage rate should only go up a 2% maximum until the mortgage is paid off.

Bailouts or Bankruptcies you decide.

 

[Machjo]

I say bankruptcies.

I watched the Dragon's Den last night too on the National, and as I was watching was reminded of an idea I'd had before.

Most of the Dragons rejected the idea of tax cuts arguing that people would not spend that money and so drag the economy further into recession. As a result, they were forced to brainstorm all kinds of projects, the efficiency of which was not necessarily low, but at least dubious. I'd proposed awhile ago on in Canadian Content that the government make a larger protion of our personal income taxes deductible at a one-toone ration through charitable donations. I can see the following advantages with this:

Unlike tax cuts whereby people might just put the money in their bank account and so drag the economy even further into recession, this policy would still force money to be spent, either by government or by charitable institutions (the United Way, UNICEF, etc.). This could even give birth to new institutions that could focus on providing funding to government infrastructure projects that they agree with, etc. The main difference between this and the government spending it is that though the money would still be spent and thus stimulate the economy, the taxpayer would have more say in how it is to be spent. After all, government buraucracy is not always the most efficient dinosaur on the block. That being the case, if a charity should develop a reputation for being an efficient provider of services to the public, then people will start giving to it instead and declaring it on their income tax instead of letting the government waste it on buraucracy. This would also reduce headaches for the government because it would allow more efficient charities to take over certain government services, thus allowing the governemnt to focus on other issues. So this way government could do a better job too.

 

[taxslave]

Machjo: I can see potential in this provided the charities spend the money in Canada. I don't see where charities that work over seas, no matter how worthy their project would help the Canadian economy. Unless they buy Canadian grain, ship it in Canadian crewed ships and distribute in Canadian built trucks how would we as a country gain?

 

[darkbeaver]

Bankruptcies.

 

[normbc9]

Here we are now five full months into the global financial crisis and we are seeing some reactions from many of the corporations that sought a bailout or bridge loan. The banks are just as stiffnecked as they were before this crisis began. The US auto industry isn't responding like we expected. All I see is their advertising campaigns about how energy efficent the new vehicle offerings are. I rented a new GM offering touted to be more fuel efficent than some popualr off shore brands and found that to be nothing but hype. My vote? If they fail, it is the results of their bad management and yep, let them sink. The excess perks, bounuses and retirement gifts continue and we are told without them we will no longer be competitive. Why not terminate this greed driven idea and find out?

 

[Machjo]

Machjo: I can see potential in this provided the charities spend the money in Canada. I don't see where charities that work over seas, no matter how worthy their project would help the Canadian economy. Unless they buy Canadian grain, ship it in Canadian crewed ships and distribute in Canadian built trucks how would we as a country gain?

From an economic standpoint, giving to even foreign charities would help the Canadian economy by putting more Canadian dollars for sale on the market (after all, Canadian dollars are useless abroad; these charities must sell it in exchange for local currency). According to the rules of supply and demand, if more Canadian dollars are put for sale, while Canadian demand for foreign currency increases, the relative value of Canadian dollars to foreign currency drops. These are the basic rules of supply and demand. If the value of the Canadian dollar drops on the world market, then Canadian goods become more affordable to others while foreign goods become less so to Canadians. This would naturally increase the demand for Canadian goods on the world market and so create jobs for Canadians.

And another point. According to international agreements, Canada is supposed to give 1% of its GDP to international development. Why should the taxpayer not have a say in that too?

I remember reading all kinds of stories of incompetent management at CIDA. So why would I want my money going to them? Let me decide what international charity my money goes to.

 

[Machjo]

In some ways, a recession is a good thing. It purges the economy of inefficient baggage and forces people to brainstorm new ways of managing government and the economy.

Let the inefficient companies fall and retrain people for the more efficient ones. For example, if I were the manager of a garage and found that in the midst of this recession I couldn't find qualified mechanics, I could start my own registered charity that would train new mechanics and give my tax dollars to it. It would train the mechanics and I could hire them. Bingo.

 

[Cannuck]

Unfortunately (or fortunately - depending on your point of view), allowing corporations to grow to the size of your GMs or your Exxons means that the downside of allowing these behemoths to fall is just too great. While I would personally wish to see these corporations go bankrupt, it simply isn't in the nations interest to let that happen. Hopefully, politicians have figured out the foibles of there economic actions including deregulation and make the neccessy changes to business structure so that bankrupcies don't spell disaster.

 

[Tyr]

 

[Machjo]

Unfortunately (or fortunately - depending on your point of view), allowing corporations to grow to the size of your GMs or your Exxons means that the downside of allowing these behemoths to fall is just too great. While I would personally wish to see these corporations go bankrupt, it simply isn't in the nations interest to let that happen. Hopefully, politicians have figured out the foibles of there economic actions including deregulation and make the neccessy changes to business structure so that bankrupcies don't spell disaster.

Why is it in the national interest. I remember a documentary recently pointing out that Canada has a shortage of about 15,000 qualified mechanics in spite of the recession. If this is the case for one industry, I'm sure other industries are in the same boat. Why not let GM and friends fall, and retrain their workers for the available jobs?

That again would be an advantage to making taxes charity-deductible. Locals at the grassroots know what is needed. They could set up free schools that train unemployed locals in jobs for which there is a skills shortage right now.

 

[Cannuck]

Why is it in the national interest.

Too many jobs are tied to the big three auto companies (one example). If it was only the people making cars it might be acceptable but there are estimates as high as 500,000 jobs directly or indirectly tied to these companies. The solution is to split them up.

 

[Tyr]

split what up? The suppliers are the auto makers?

 

[Machjo]

We need to make a distinction between demand-deficient unemployment (caused by lack of market demand, as in the case of a recession like now), and skill-deficient unemployment (the inability to find work owing to a lack of skills currently in demand in the market). Though we cannot deny that demand-deficient unemplyment is real right now, it appears that the recession has blinded us to the reality of skill-deficient unemployment. The two are not necessarily mutually exclusive; the fact that our economy is suffering from demand-deficient unemployment does not automatically negate the existence of skill-deficient unemployment too. Such grassroots organizations might be more capable than government buraucracy of identifying this kind of unemployment in any given local economy and of training some of the unemployed for those jobs that are still in demand. This could at least solve the problem of skill-deficient unemployment, and to some degree demand-deficient unemployment too through the creation of jobs for teachers and other staff in job-training programmes. This might not solve the problem of demand-deficient unemployment entirely, but it would still be a start, while killing two birds with one stone (demand-deficient and skill-deficient unemployment).

Then we have the issue of regional unemployment which, like skill-deficient unemployment, is a form of structural and not demand-deficient unemployment. This could be solved by negotiating labour-mobility agreements through the WTO. This way, some unemployed mechanics from abroad who are looking for work in Canada could do so with less buraucratic hassle from governmetns and embassies. Inversely, unemployed Canadians who have skills in demand abroad could benefit from such agreements likewise.

Charitable organizations might likewise have ideas for solving various structural forms of employment. Some, for example, might be willing to pay relocation expenses for those who are willing to relocate (which, by the way, could also help with demand-deficient unemployment by creating new jobs in the moving industry). Others might want to offer free training courses to the unemployed for needed skills in the market. Yet others might have ideas on how to build more cost-efficient shelters for the homeless, etc.

I think charitable organizations would have a better feel for the pulse of the needs of a community at the grassroots than large distant federal buraucracy would.

 

[Cannuck]

split what up? The suppliers are the auto makers?

The auto makers.

 

[L Gilbert]

Bailouts or bankruptcies you choose.

Sit down for I am about to say will blow your mind “The Taxpayer Is Responsible For This Economic Disaster”

I can only quote a master of the sales and motivational speaker Zig Zigler the taxpayer suffers from “Stinkin Thinkin”

In this free capitalistic society that we live in the taxpayer elects people to represent their interests in a government.

The taxpayer then tells the government what they want and the government does it............

I quit reading it right there. The taxpayer didn't want an expensive gun registry and said so, we have one now. America didn't want to be involved in a mess in Iraq, they have one now. I would suggest you quit listening or reading sales pitches. lol