Tuesday, February 21, 2012

Students' Choice Debate: "The GM Bailout"

RESOLVED: The government bailout of General Motors was fair and appropriate.

PRO
The GM bailout was successful mainly because it saved more than 1 million jobs 9. It saved this many jobs because it saved all the industrial workers jobs in Michigan and also it saved all the GM dealership jobs across the US. It helped GM turn around its company because after its 21 month sales decreases it finally had sales increase in 2009.  “GM ends up an economic contributor to the U.S. economy,” said Barry Ritholtz, author of “Bailout Nation” and chief executive officer of New York investment research firm FusionIQ. “It’s manufacturing products, it’s creating jobs, it’s buying wholesale parts, it’s doing what an industrial company is supposed to do.” It also saved the American Auto industry. If GM were to fall out and go bankrupt many jobs would be lost and their wouldn’t be another major car company would be able to take GM spot and have such a turn around as they did. (Kamil H.)



General Motors


CON
Point #1: No guarantee of long-term success

What’s to say it won’t happen again? GM was a victim of bad planning- Got themselves into the situation to begin with; bailout is rewarding bad business. Companies rise and fall with the trends of the economy: if taxpayers just give them more money, they won’t restructure/ rethink during the trough in order to be successful in the future.  Bailout just adds to the problem instead of fixing it. Bailout's short term effect takes away from the development of future energy sources - not forward thinking- we are only going to drive gas powered cars for so long before we will eventually run out of gas.

Point #2: GM Bailout was unconstitutional

Government can’t spend taxpayer’s money to take ownership of private institution; GOV's actions violate Commerce Clause (Article I, Section 8, Clause 3), which is designed to balance the power of government, especially that of the federal and state governments. The commerce clause was created to prevent interference by the states, which in Gibbons v. Ogden (1824) Justice William Johnson called “conflict of commercial regulations, destructive to the harmony of the States.” Constitution gives government authority to regulate, not to do absolutely anything to control it and bring together the states as an excuse for overwhelming federal power. And also, just because there is an “emergency” doesn’t justify going against the Constitution in an effort to “make things better.” If every time there is an urgent problem and we disregard the Constitution, it loses its validity - we are neglecting and not respecting the effectiveness and core principles on which our nation is founded. (Brookie H.)

16 comments:

Travis S said...

I feel that the bail was unconstitutional because it spent tax payers money on a private institution but if they didn't choose to spend this money then the US auto industry would almost disappear and the United States would lose millions of jobs in a time that jobs are hard to come by. I don't think that it is a big problem of it happening again because GM is under such a close eye of the Government that before they would start to go under the Government would be able to give them advice to stay earning a profit.

Megan Riney said...

I agree with the con side of this debate. It is unconstitutional and frankly inappropriate that the government spent federal funds to bail out a private company. Their point of disregarding the Constitution in case of every problem causing the Constitution to lose its validity really resonated with me. This notion makes me think, why would I side with the pro, whose argument lessens the validity of the Constitution, the very basis of our country? All in all, I believe the con side had the most convincing argument.

Megan Riney said...
This comment has been removed by the author.
Larson McQuary said...

I agree with Megan in this case. Supporting the Pro side completely disregards the basis of what our country was founded upon and disrespects the Constitution. Federal money should not be spent on a private company. Yes there are many jobs at stake and much money to be lost but that doesn't mean that relief funds can come from the government. I wouldn't be so against it if the money came from another source because I don't want to see jobs lost or a company with such a great impact on our country be destroyed.

Larson McQuary said...

I agree with Megan in this case. Supporting the Pro side completely disregards the basis of what our country was founded upon and disrespects the Constitution. Federal money should not be spent on a private company. Yes there are many jobs at stake and much money to be lost but that doesn't mean that relief funds can come from the government. I wouldn't be so against it if the money came from another source because I don't want to see jobs lost or a company with such a great impact on our country be destroyed.

Colton U said...

I agree with the pro side of this debate. I believe that the government had to step in or less the US would have lost a huge industry and thousands of people would have lost their jobs causing a crisis. If GM went under it also would make Ford the only US car producer and Ford would eventually go under as well leaving the car industry to other countries. GM has already produced and given the government half of the money they own them in such a short period of time and will easily repay them. Eventually the government will be making money off of GM and everyone will see this as a good thing.

Morgan K said...

The cons have a more compelling argument because not only do they prove how the bailout was unconstitutional, but also that the outcome cannot decide if the bailout was appropriate because at the time when it was issued the repercussions were unknown. The government had no constitutionally justified reason for the bailout, and in granting it they overreached their authority.

Ryan said...

I support the pro side of this argument. Without the United States stepping in, so many jobs would have been lost that it would have been catastrophic. As we plunge further into an economic decline, those jobs are needed. Secondly, GM isn't just a contributer to the economy, it is a major contributor. The bailout was done on terms of the betterment of the country and that is all the reason that is needed.

Blair S. said...

I side with the con side because the bailout was unconstitutional and the government is basically bailing out a business that could not survive on its own. The bailout worked, but who is to say that if and when the government ever bails out another company again, that the company will not fall right back into its old patterns and declare bankruptcy or go out of business again. The government is not allowed to interfere with private companies in that way based on the Commerce Clause. Overall, the government overreached into affairs it is not legally able to, and risked spending federal money on an at best shaky investment.

Michael Murph said...

I believe that the government bailout of General Motors was fair and appropriate. If the government had not stepped in there would have been a huge number of jobs lost. This enormous amount of lost jobs would have hurt our struggling economy even more. The government does not typically bail out non government entities, however in this case it was the right thing to do. It saved countless jobs and a company that is one of the backbones of the U.S.

Eric M said...

It was necessary and appropriate for the United States government to bail out GM. It was in our nation's best interest to bail out this private company in order to save our national economy. It is far cheaper to pay for the bailout and save GM then to pay for these expenses later as the consequences become far worse, magnified and dispersed. Social services necessary to solve the social problems are far more expensive. If this many citizens had lost their jobs, they would have been left unemployed and unproductive for a significant period of time because there is a vey difficult job market to being with.

Katherine Trent said...

I think that the GM bailout was more than wrong, it was unconstitutional. No matter what the intent was, the idea as a whole goes against the principles of the constitution. By rewarding bad business, it gives companies a false sense of security that every time they business is in trouble, the government will come to the rescue. This, however, would be impossible. One might argue the bailout was necessary to prevent future turmoil, but by going against the constitution it puts its authority at risk. If every time there is an “emergency” we deem this a good enough reason to go against the constitution, we will lose our core principals. The Constitution is the foundation of America and there is no reason good enough to go against what has made us successful.

Marcy A said...

I believe it was necessary for the United States government to bailout GM. If the United States government did not help out, the auto industry would continue to fall out and eventually other problems would arise such as more unemployment. During the time of the bailout, the unemployment rate was already higher than normal. The bailout helped save the economy and people's lives.

Tucker D. said...

When the government bailed out GM, it may not have been unconstitutional but it was necessary to keep the economy from sinking into a deeper hole. When the government used tax payers money to bail out the major company they did cross a line making this an unconstitutional act, but when we look at what would have happened if the government had not stepped, then we see that this was the best option. If GM hadn’t gotten bailed out then the number of unemployed workers would have reached an all time high in the Unites States, not to mention the massive hit taken to the economy. Many citizens may not have agreed with the bailout but it was necessary and what was best for our country.

Molly Aaron said...

Truth be told, it would not have been fair to put hundreds of thousands out of works because the caused chaos in the economy.
When Obama first announced the bailout of General Motors, I was unsure about it, but when you think back to the Great Depression, the government made desperate measures to put the economy back on track and get people working again ("The New Deal").
Although the GM bailout didn't create new jobs, it did keep people employed and help keep the government from paying out unemployment to thousands upon thousands of people. In doing so, is saved quite a large amount of government's money.

Dakota said...

I agree with the pro side of this debate. I believe that the government had to step in or else the US would have lost a huge industry and thousands of people would have lost their jobs causing a crisis. It was in our nation's best interest to bail out this private company in order to save our national economy. It is far cheaper to pay for the bailout and save GM then to pay for these expenses later as the consequences become far worse, magnified and dispersed.The bailout was done on terms of the betterment of the country and that is all the reason that is needed.