The AlGore Mobile?
- Thread starter Wallet
- Start date
Yes, I forgot that in the US when a private business turns into a failure the government may decide to ''help'' this failed business with government (read: citizens') money
In a capitalist economy if a bank grants a loan to a business that further fails then the bank's owners take the risk of the bad credit commitee decision.
In a capitalist economy the government would NOT risk a single penny of the public money as a loan to anybody.
Anyway, US is a socialist country.
Quote from Tresor:
Yes, I forgot that in the US when a private business turns into a failure the government may decide to ''help'' this failed business with government (read: citizens') money
In a capitalist economy if a bank grants a loan to a business that further fails then the bank's owners take the risk of the bad credit commitee decision.
In a capitalist economy the government would NOT risk a single penny of the public money as a loan to anybody.
Anyway, US is a socialist country.
I mainly agree with the sentiment of your reply, but not with the last. The US has a mixed economy.
Quote from Tresor:
Banks should grant loans to private corporations based on a feasible busness plans, not governments.
Sheer socialism
Fiskar automotive has a good chance at success... their talent pool is amazing, Phd's with lots of automotive industry experience and a highly talented staff in general. There have been a few car designs where a lot of fundamental things were gotten right at the outset, I believe that the Karma is one. It has styling, great interior, low center of gravity, all electric drive train [not that horrible thingy with the mechanical transmission and an electric motor added], rear wheel drive, plug in hybrid, 403hp and 950 ft. lbs of torque, aimed at the executive market... I can even see businesses within their current business, that drive train would be fantastic for a pickup truck or a specialty vehicle for towing a large travel trailer... they could spin off a division for that...
It may be true that their product / technology is unique, but is it a state's role to decide which direction the economy should go?
And clearly the government deiceds on direction here by granting a loan to a specific type of technology / business. It is no different than central planning in Communism.
What US government did in the case of Fiscar is: ''We the government decided that automobils are preferred over planes / rollercoster / teleportation / railway / other. We the goverment decided that electricity is preferred over gasoline / nuclear / hydro / whatever''.
Even the most enlightened governments make mistakes (see: Freddie and Mac). Any government decision to support a given technology / business type over the other leads sooner or later to a bubble because too much resources will devoted by investors to a certain government- preferred type of behaviour.
Let me give you one example: a few years ago EU gave incentives for solar panels producers. Many new business were created. Businesmen were allocating their funds into solar production because they were given financial incentives. If not for the financial incentives that may have very well invested in other new (maybe better) technologies. What happened this year?
A little state-created bubble bursted. We will have to close a majority of them as they are going bankrupt. Some investors lost money, some are happy because they manged to corner the state on grants. We will have to finance social benefits for the unemployed. And we already paid for tax exemptions of these companies, etc.
The state shuold not mess with the economy because this is a waste of time and money and potentialy stops a development of new technologies.