Sunday, May 31, 2009

Government Ownership is the New Welfare

According to Wikipedia, welfare is "financial assistance paid by taxpayers to people who are unable or unwilling to support themselves." Call me cynical, but it sure looks like the government take over Chrysler and GM is a new form of welfare. Here's my case using the definition:

  1. Financial assistance paid by taxpayers. If it weren't for taxpayer funds, many automaker employees would no longer have a job. Essentially, the taxpayer is covering the salaries of automaker employees.

  2. Unable to support themselves. Each company is losing billions of dollars each quarter. They build cars that are losing market share. Every car produced loses money for the company.

I don't believe the new GM or new Chrysler will ever be profitable as free standing companies, and thus, will require long term direct government assistance to continue. To me, welfare by any other name is still welfare.

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This is not financial or policy advice. Please consult a professional advisor.

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1 comment:

LSM said...

Doesn't sound cynical to me, it sounds logical.