Why is welfare for the poor wrong, but welfare or bailouts for corporations good?

The airline industry was bailed out after 9/11 I have witnessed Chrysler bailed out by the government at least two times, two years after one of the bailouts they bought the company the produced Lamborghinis. We are all witnessing the government bail out of many banks in America. Now this happens over and over and when things go good for these companies do they ever pay that money back?

Given these facts, many people complain that welfare for poor families is somehow hurting America or is wrong for some reason. If a family can't afford to feed their kids I don't have a problem with the government helping, if they can't afford housing I don't have a problem with government helping. If the poor can't afford job training or higher education then the government should help. This IMHO should be one of the roles of government.

If it's ok for corporate welfare it should be ok for poor people. Protecting families and providing a level playing field should be a role the government takes.

[edit on 24-7-2008 by LDragonFire]

reply to post by LDragonFire


welfare for the the poor ? NOOoooo, god forbid that's socialism.

all jokes aside, the reason behind the double standards is mainly because america is owned by these corporations, they write the rule and advance their ideas thru the media.. lets just say a "welfare system" for the poor wont benefit them- they would much rather have salves.

Both are wrong (welfare for anyone is bad), but its not so clear cut. Companies that are provided bailouts have been analyzed and it has been found that the total negative impact to the economy from their failure would surpass the amount of money needed to bail them out.

When companies fail the impact is not localized. It spreads throughout the economy, induces hysteria if the company is large enough, and promotes fear mongering by the media. The people employed by their company lose their jobs and go on welfare, the people who used the companies service will pay higher prices as the competition adjusts prices upwards because sector competitors have diminished. Investors - which includes everyone from hedge fund managers to 401k retirement people - lose money. Market confidence falters, it ripples throughout all sectors. Foreign investors withdraw over market hysteria, causing other ripples and losses of capital. Depending on the size of the company, the total economic impact of simply letting it fail can far, far surpass any amount it takes to give a bail out.

The simple truth is that when 1 person fails, their impact on the whole of the economy is little and not noticeable. Government makes policy for everyone, and that includes shuffling and maximizing resources to benefit the most people with the least cost. Providing individuals welfare does not promote a unit for unit efficiency gain, while saving a company (if its large enough) promotes huge amounts of efficiency.

It comes down to the numbers. It may not be socially palatable, but is reality. It has nothing to do with any of the populist propaganda on ATS - the corporations aren't running things to force these decisions, the elites aren't protecting themselves. The government has attempted to make a decision that lessens the pain for everyone. Sometimes that involves allowing things to fail, often it means providing bail outs.

[edit on 24-7-2008 by ALightinDarkness]

reply to post by LDragonFire


Hi DF,

I think the subtext in your question is the answer your looking for. Of course corporate welfare is a travesty (Social welfare could be considered as such, but the costs are FAR lower).

Did the VC (Venture Capitalist) banksters who made off with MULTI-MILLION dollar bonuses offer to share them with the rest of us common folk? I think not. Did the Wall Street Monetary Glitterati send Aunty Simone a contribution to the Church's orphan fund? Of course not. That was in the GOOD TIMES. And here we are, on the edge of (at best) a recession or, (at worst) the worst depression to hit in 80+ years.

So here is the crux of the matter. Do"WE", as a society, encourage the privatization of gain, AND, the SOCIALIZATION of loss, OR......

Are we Capitalists ?(you know, those boring savings based Puritans who built the continent up with hard work and scrimping) I sort of wish we had been founded by Rastifarians, Imagine Independence Day!

Are we Socialists ?(The French! Damnit! With their Socialized Medicine and Education). Or any other European government.

Are we Communists? (Think MAO or Stalin) "Ok, you get Two Ghiraffes and you need to knit mittens" : . Sorry, that's Absurdist's.

Or.....? Are we a society that has come to the end of it's shelf life? Seriously. Are we beyond the point of organized governance?

Just a thought.

Wait?

What was the question?

Gram.

reply to post by LDragonFire


I see both as wrong.

I don't think the government should be bailing out anyone, corporate or private, who failed to make wise financial decisions. Their screw ups should not cost me or any other tax payer the money we worked for. They made the mistake & they should fix it or fall on their own.

I do however, understand, that a collapse of certain corporation's would adversely affect our nations economy, but when do we say no more? When the money runs out & our economy is tanking because the nations debt has increased to astronomical levels? At the rate we're going with these bail-outs, both corporate and private, that economic crash may just happen sooner rather than later.

good question!!!! really got me thinking

at least the poor were probably always poor,,,, not greedy big corp who screwed up,,,,, and think,,, even the poor are bailing out these big companies who do pay some taxes,,,,,
even welfare buy gas and such other hidden taxes we don't always think about

it's weird---while maybe the gov't should help the people,,, in my mind,,, as a result they also bail these companies out,,,,, which i don't believe in

but i guess it's a double edged sword

Our government giving oil companies tax breaks in a time they are making record profits is just not right, we are cheating ourselves out of much needed tax revenue by doing this. There not just making profits, they have made the largest profit in US history and then turn around and got 1 - 4 billion dollars in tax breaks!!!!

People say that the poor should open a business, do you know how much this costs in America? It's outrageous, permits, license, insurance, bond, incorporating. If the government really wanted to help the poor open a new business they should wave these costs, that would be corporate welfare I would believe in.

And for God's sakes I really would like to see walmart the largest corporation in the world stop getting taxpayer money for the building of there new stores!!!!

Exxon Mobil sets annual profit record
And the world's biggest companies are...

Its not welfare for corporations. That is completely different.

Keep in mind that the US has supremacy because our economic engine burns hotter, more efficiently, and with greater precision than any other nation. Our government benefits from trillions of dollars in GDP. If they allow major corporations to flounder, the GDP drops and the US is left in a MUCH weaker state.

It is not like the slacker who cashes the monthly check without putting anything back into the GDP. If Ford/GM crash, how much tax revenue is lost? But if the government props them up, they keep thousands employed and retain the tax revenue.

it is common sense. Just think about it for a minute.

Of course, we could stop the tax breaks and push MORE business off shore. I guarantee you that China is willing to play the game with corporations. If we are not, we are doomed to a third world future.

[edit on 27-7-2008 by bigfatfurrytexan]

Well before we go sweeping everyone on welfare with one big swoop called laziness. We need to understand the facts. Welfare comes in many different forms, and include help to the working poor. So some of you need to get the notion of "welfare" being the poor women with multiple kids in a ghetto or trailer park out of your heads, its highly sterotypical and many times incorrect. There are many low ranking military families who get assistance like WIC and food stamps. Yes! Are enlisted low rank soilders who have families struggle sometimes to put food on their tables too, should we call their wives who sign up their children up for WIC which gives them free beans and milk cruel and sterotypical names...I think not. In many states if someone makes less then $12 and hour full-time they can still qualify for foodstamps and state medical care for there children.

So yes I think its a slap in the face to poor working americans to see large multi million dollar cooperations getting bail outs. But then when you watch CNBC and someone even remotely suggest giving struggling home owners a bail out its like satan himself walked in the room . It's just plain wrong. Because in 10-to 20 years these same companies that are being bailed out are going to hose more people for their hard earned money again!

[edit on 27-7-2008 by whoreallyknows]

[edit on 27-7-2008 by whoreallyknows]

[edit on 27-7-2008 by whoreallyknows]

Forget the 'bail outs' what about subsidies?

If you can not equate a subside to welfare you simply do not want to.

I don't understand why these corporations are entitled to bailouts when they're paying out outrageous severance packages to the same executives that are responsible for their failures.

Why should the little people lose what they have invested, while these corporate executives walk away with multimillion dollar Golden parachutes? Why are they not being held accountable for their mistakes? It should be more like: you're fired, no severance package, no benefits, nada!

It is true that the bailouts for big companies is meant to avoid an even larger negative impact on our economy if the company were to fail. But it is the fault of these companies that we have become so reliant on them, and that they are unable to manage themselves properly. Basically, it's extortion. Time for America to pay up their "protection" money.

Welcome to the New America. The days of the "lazy" or "addict" welfare recipient are over. One in eight of us now live below the poverty line. Your friends, your neighbors, people in your family, all with the humble American dream of paying for the most basic costs of living.

Things have gotten worse, fast, since this video was produced...

Originally posted by LLoyd45
I don't understand why these corporations are entitled to bailouts when they're paying out outrageous severance packages to the same executives that are responsible for their failures.

Why should the little people lose what they have invested, while these corporate executives walk away with multimillion dollar Golden parachutes? Why are they not being held accountable for their mistakes? It should be more like: you're fired, no severance package, no benefits, nada!

so, in essence, what we have here is a confusion between the company and the executives. The company, as an incorporated entity, can be looked upon as an individual, logically. However, remember that the ills of the executive should not be projected upon the corporation.

The corporation provides MUCH NEEDED tax revenue. Without the tax revenue, the US would be a third world nation.

Now, the issue with "corporate raider" execs is a different issue altogether. The thing is, in the past execs made a good living, but they weren't going to be wealthy like kings. That was done away with by thins like stock options. They were given a vested interest in the results of their work by giving them stock options.

The problem for me is that they should have a limit on the dividends they can reap from the options, and be required to "sit" on the stocks themelves using similar tactics as you would find with most retirement plans (think 401k). This would encourage them to seek tenure within their company, as well as encouraging them to seek long term stability and future growth. It breaks the "raider" cycle.

We have a ways to go before we can manage the corporate environment we have created in our nation. But we MUST continue the 'bail outs" in key sectors if our nation is to maintain superiority.

The problem is not bailing out big companies , it is not sufficiently punishing those who f%%d up in the first place, and that's why the same corruption and implosions happen but only the names change, but the CEO's get golden parachute's.

As a World We are corrupt beyond belief. There is not hope, until we look into the eyes of despair or a nightmare, that would get us to face enough pain in a sharp enough way for us to change in a meaningful way. As individuals sure we can improve one by one alot easier, just by being guided a little more by our hearts, but for the economy the system involves too many people and too much money. The elite are very smart and basically that = survival of the financial fittest (note i did not say happiness) but as the world becomes more and more heartless the poverty line will rise and rise like a flood.

reply to post by cpdaman

...the poverty line will rise and rise like a flood.

Actually, to be technical about it, the poverty line does not go up very much at all, and that is a part of the problem. If you're a single person making twenty-grand a year, you are making TWICE what the official poverty line. But in all practicality, you are still living in poverty, unable to pay for basic living expenses.

Where I live, the official poverty line doesn't even match the average rent. Forget about all the other nice things Americans like to have, like food.

So in reality, the truth of the matter is being hidden behind slick figures, and the "official" stamp.

Oh, and by the way, in case anyone doesn't know,poor people pay taxes just like everyone else.

[edit on 7/27/0808 by jackinthebox]

Glad this topic is active, it looks like there was a provision in the Housing bailout bill that was put in to help Chrysler out.

PAGE 662 -----------------------------------------------------------
1 gate shall not use the payment of tax described
2 in paragraph (1) as an offset or credit against
3 any tax liability of the applicable partnership or
4 any partner but shall refund such payment to
5 the applicable partnership.
6 (B) NO INTEREST.—The payment described
7 in paragraph (1) shall not be taken into account
8 in determining any amount of interest under
9 such Code.
10 (3) AMOUNT OF DEEMED PAYMENT.—The
11 amount determined under this paragraph for any ap12
plicable taxable year shall be the least of the fol13
lowing:
14 (A) The amount which would be determined
15 for the taxable year under section 168(k)(4)(C)(i)
16 of the Internal Revenue Code of 1986 (as added
17 by the amendments made by this section) if an
18 election under section 168(k)(4) of such Code
19 were in effect with respect to the partnership.
20 (B) The amount of the credit determined
21 under section 41 of such Code for the taxable
22 year with respect to the partnership.
23 (C) $30,000,000, reduced by the amount of
24 any payment under this subsection for any pre25
ceding taxable year.
PAGE 663 -------------------------------------------------4) DEFINITIONS.—For purposes of this sub23 (A) APPLICABLE PARTNERSHIP.—The term
4 ‘‘applicable partnership’’ means a domestic part5
nership that—
6 (i) was formed effective on August 3,
7 2007, and
8 (ii) will produce in excess of 675,000
9 automobiles during the period beginning on
10 January 1, 2008, and ending on June 30,
11 2008.

Housing bill Pages 662-665

I can't think of any other "partnership" that would qualify. Ford and GM are still publicly traded companies.

Originally posted by bigfatfurrytexan
Its not welfare for corporations. That is completely different.

[edit on 27-7-2008 by bigfatfurrytexan]

Ummm No its not. Its welfare but it is what it is and that is free money. Will the companies that get bailed out have to pay that money back when they get back on their feet? Nope. Will the execs have to take big pay cuts till the times get better? Nope but the typical employees will. Dude its a welfare check you can spin it in any direction you want but it is as simple as socialism for the losses and free market for the profits. Heres the kicker this isnt even a partisan issue the dems & the repubs both feel the same way. Now I havent even gotten into subsidize yet that people like big oil and big ag get from the government. You talk about glorified welfare holy smokes. Id like to find a stat really a good state showing the dollar amounts given a year in subsidize and bailouts and what is given a year in welfare. Im willing to bet if all the sludge was dug up the bailouts and subsidize would far exceed what is given in welfare.

The fact is the government shouldnt be in the business of either. But what do you do when you have a monetary system that robs people blind of their wealth?

The OP has posed a question that is about to catch fire in America. I think we are seeing a real change in perspective from the U.S. population on this subject. People are waking up to the disparity and double standard of our current "free market". More perspective:

www.huffingtonpost.com...

Most Americans believe they possess a natural aversion to socialism. Charges of "socialized medicine" have derailed much-needed health care reforms for years.

After all, we are a capitalist society, we believe in personal responsibility, lifting ourselves by our bootstraps -- at least that is the stereotype we like to promote.

The version closer to reality is America offers capitalism to low-income individuals, but is more than willing to unleash its socialist impulses for the wealthy…

As former Treasury Secretary, Lawrence Summers recently opined, "The illusion that the companies (Fannie and Freddie) were doing virtuous work made it impossible to build a political case for serious regulation."

He adds, "When there were social failures the companies always blamed their need to perform for the shareholders. When there were business failures it was always the result of their social obligations."

This leads Summers to conclude that the gains were being privatized and the losses socialized. This is great for the shareholder, but hardly in the best interest of the society as a whole.

www.alternet.org..." target="_blank" class="postlink" rel="nofollow">www.alternet.org...

"Free trade" policies and the loan sharks that have run the World Bank and the International Monetary Fund have destroyed national economies. Millions of people have been forced into poverty, and entire communities have been displaced from the countryside. Multinationals and northern industrial nations siphon wealth from the developing countries. Those that migrate from their homelands to make a living in the north are greeted with walls, bullets and racism. In the United States, millions are homeless, unemployed, in prison, or one paycheck away from bankruptcy. The social wage has been beaten down to unsustainable levels -- real wages are lower now than they were 30 years ago. Yet the costs of fuel and raw materials have skyrocketed, causing worldwide food shortages. We have wiped out public budgets by eliminating taxes on those who profit most. Vital public infrastructure and services cannot meet basic needs like maintaining the levees in New Orleans and reconstructing the Gulf Coast, or controlling the devastating blazes in Southern California. Yet the majority of our federal budget sponsors the wars and occupation in the Middle East, the warehousing of generations of the poor and people of color, the witch hunt of immigrant refugees of U.S. foreign and trade policy, and the growing national debt.

Capitalism unchecked has given us Big Oil, Blood Diamonds, Enron and Halliburton. They have given us Afghanistan, Iraq, Guantanamo and the Wall of Death on the U.S.-Mexico border.

www.popmatters.com...

According to Chomsky, the chasm between "free market fantasies" and "really existing free market theory," that is the one that is actually applied and not talked about, is acute and growing. The dominant political rhetoric of our time states that the poor and working-class must learn responsibility and be subjected to market discipline which is good for building character through tough love. The state should not intervene to help out these folks when they struggling or fail. Conversely, most wealthy individuals and corporations demand a "nanny state" to protect them from market discipline so that they can rant and rave about the marvels of the free market while getting properly subsidized by others through the state. Despite the rhetoric of laissez-faire and free competition, these same wealthy interests demand state aid to minimize competitive risk and help maximize profits. So, if anything goes wrong, the state, through tax dollars, intervenes to bail out the corporation or wealthy individual. In fact, according to Fortune magazine, every single one of the top 100 leading transnational corporations benefited from state intervention on their behalf. Twenty of that 100 were saved from total disaster, meaning collapse, by state bailout. In effect, then, free market ideology is founded on a class-based double-standard.

Amid all the details and statistics that Chomsky presents to back up his views, though, there is a simple, but profound, point at the heart of the argument: There is no such thing as a "free market." Never has been. Never will be. In fact, the government has always interceded in the economy, most consistently on the side of large corporations against the interests of the majority of American citizens. The important question, then, is not whether or not the government should intercede in the economy, but, rather, on whose behalf they should act and toward what end. Chomsky makes clear that "free markets" are intended only for the poor.

reply to post by mybigunit


It is welfare in the same way that each American getting the "stimulus" check is welfare. We all pay taxes, but we take some extra subsidies every now and then. "Tax free" school shopping weekends, Economic Stimulus checks, Earned Income Credits, Pell Grants. Each of these things is just about the same as what many companies get.

The "bailout" is less for the corporations benefit, and more for the nations benefit.

Why has no one addressed how the "bailout" is needed to ensure the overall health of the US economy in the long term by defending our Gross Domestic Product???

It does no good to complain about the companies. They are NEEDED by the US. The people we should complain about are the corporate raiders.

You guys DO realize that the CEO's can afford for lobbyists to write laws that benefit the CEO's, not the shareholders. That is criminal. As well, the trading practices of CEO's (and how they leverage their stock options) should be criminal (though it currently is not).

reply to post by LDragonFire


Welfare foor the poor = breeding ground for laziness and drug abuse
Welfare for the companies in trouble = saves jobs, spurs growth.

don't get me wrong, welfare is a good thing as far as it is managed correctly. we have all seen the welfare queen with 3 or more kids driving up to the grocery store in her brand new Denali and paying with a food stamp card.

it is too easy to cheat the current system.

also, people have to take drug screening to get a job but there is no drug screening for receiving welfare.
That is an effed up situation.