"This bailout was a terrible idea," says Jeffrey A. Miron, a senior lecturer in economics at Harvard.
Here are at least 5 reasons why he believes that.
1. Lending to borrowers who could not handle the risk
In other words, they were allowed to get in over their heads while the government looked the other way.
2. Bankruptcy is not the end of the line
Someone else will, and usually does, come along to own the company that’s faltering; namely the creditors. This is how a free market works in times of distress.
3. There will be no Armageddon
The government does not need to step in and add more problems to a bad situation it helped create.
4. The bailout will open the door for even more government meddling in businesses in the future
Do we want a Socialistic government? Folks, that’s about what we’re going to get if we’re not careful.
5. We should not bail out Wall Street just because we can
Why should the taxpayer have to pay more for bad assets than the market is really willing to pay? Let bad businesses take their licks now instead of later.
Of course, I have paraphrased Jeffrey A. Miron’s article, but I see him as one brave voice who is willing to speak his mind, even if that may not be the popular thing to do right now.
To read more about his opinion go to Commentary: Bankruptcy, Not Bailout, Is the Right Answer