29 February, 2011
Should the United States government have assumed control of General Motors?
If you were to read a story in the news that a government had assumed control of a private company, what country might come to your mind? Possibly Russia, Cuba, China, maybe even Vietnam? Probably the United States would be the furthest from your mind. Not everything the United States government does should be considered socialistic, but obtaining control of the private company General Motors was an act of socialistic behavior. As Lake Land students majoring in business and maybe future business owners, would you want the company that employed you or which you owned to be controlled by the government? Many government officials make the argument that this was the right decision, because it saved many jobs during tough economic time. This, however, is not a good enough reason to move toward socialism. The government should not have bought General Motors.
How did this all come about? First General Motors filed bankruptcy in the spring of 2009. The reason why General Motors went bankrupt was because they didn’t manage their money properly. It’s as simple as that. General Motors ran out of money and needed to be bailed out by the government. The decision to bailout this company came from several sources in government. Barack Obama was the President who was responsible for pushing this action. However, it was the Congress who passed the bill to bailout General Motors.
As for the cost of this bailout, the government had only one source of money to use. They used tax dollars for what was called stimulus spending. According to an unknown author writing in the Chicago Tribune, they state that tax payers have paid up to $50 billion and the government also took up to $700 billion from the Trouble Asset Relief Program and from stimulus spending. This is a tremendous amount of money spent, considering the hard...