Lunch Conversation on Economy

Posted by on March-27-2009 under Save Money

I recently went for lunch with some of my office colleagues. Nowadays the only topic of discussion at such lunch meetings is the poor condition of this economy. Everyone has their opinion that what caused this, what should be done to fix this etc. I normally do not keep any lasting memories of such discussions. But in this particular discussion, someone raised 3 very interesting points that really left me thinking. I thought I would mention those here to share with all of you, and get your opinions:

“Why is everyone talking about 170 million of AIG bonuses, and not about 170 billion bailout money that has been paid to it?”

This friend raised an interesting point. He said that government is trying to focus attention of everyone on this bonus amount, which is just 0.1% of the bailout money that has been paid to AIG. Government has stirred up emotions of everyone by focusing so much on this amount. They will get these bonuses back, and try to show it as a triumph of tax payers. However, what about the huge bailout money that has been paid to AIG? Because government has put all the focus on just the bonus amount, so people have forgotten about the bailout amount. And that was the whole purpose of drama about this bonus amount.

“Now that the companies are making losses, so taxpayer’s money is being poured into them. However, when they were making so huge profits, where they ever asked to share their profits with taxpayers?”

This seems like a valid point to me. All the money that is being poured into these big greedy companies actually belongs to us. We are also making losses at these times, and so many persons are out of job. So, why doesn’t government issues stimulus checks to us?

“Why is the money being given to the companies that have failed. Instead, why isn’t the money paid to those companies that have actually survived on their own”

This friend took example of Chase. This is one bank that has been able to survive without much of government money. That means that it actually has better management, that are able to steer the bank through this economy. So, why doesn’t the government pays money to Chase, and let’s it take over other failing banks? That would ensure that money is going into those hands that can better manage that. Makes sense to me.

What is your opinion about above points? Please mention in Comments.

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