A lot of talk has recently centered around the $700 Billion bailout that was passed, and the fact that President Obama has left the option for another bailout on the table. Many people seem to be glad. After all, it’s free money, right? Millions of dollars to the states, and even more money to big businesses that would almost go under. Hey, we even got a big chunk of it here in Michigan, and a couple million for a highway right near my house that I use all the time. I should be happy!

The fact of the matter is, I’m not. I’m not happy because I know where this money is coming from, and it didn’t grow on trees. When the government bails somebody (or multiple somebodies) out, it looks great in headline form: “Government Lends Billions to Failing Automakers.” In reality, the headline should read this way: “Credit Union with Huge Deficits Endangers its Members; Goes into Debt to Help Lazy Company.”

That’s really the way it is. The money, as we mentioned earlier, didn’t come out of nowhere. Every penny the government spends is coming from the people. And every penny the government wastes comes from you, too. So when the government decides to bail someone out, that’s your money their talking about! And, when the government consistently spends more money than it earns, guess who’s going to pay for that? You, obviously!

Okay, so what if you were willing to help these failing companies out. Why shouldn’t you? After all, you drive a Chrysler, and your sense of national pride would be damaged if they went out of business. Well, I’ll tell you why.

If they went out of business, there must have been a reason for it, right? “Hard economic times. We never could have helped it. It was just too much.” Well, in my opinion, that’s a bunch of hogwash. Sure, we had hard economic times recently that nicely coincided with the bankruptcy of our major automakers. But this bankruptcy was brewing for a long time. The combination of cheap vehicles, bad planning, and inflexibility was too much for the companies to handle. So they went out of business.

Notice that going out of business was a mistake, made by the company. They didn’t handle the situations correctly, and therefore the company failed. Bad leadership caused this. So why did Ford stay alive? Well, they were just about as bad as the others, but they reacted quickly, and changed their entire lineup, introducing newer, better, higher quality vehicles as fast as they could design them.

So what’s my point? That the bailout was trying to keep these companies alive. Yes, that is a bad thing. Why would we want to have companies that were inflexible, had bad planning, and build junk cars? They deserved to go out of business, and they did, even with all the “help” the government gave them.

Now, I know what you’re going to say next. If the government kept the companies alive, then they could reinvent themselves, fix their problems, and be a better company, right? Wrong. Without the threat of bankruptcy, and with the assurance that the government would help them, they would merely move along in their old ways, hoping that the market conditions would get better. After all, that’s what caused this, right?

This is the essence of a capitalist society. We need to let the failing companies know that they have to survive on their own merits; otherwise there is not point to them being in business. They need to make money, grow, and prosper, or else they are losing money, failing, and going bankrupt. We can’t help everyone who needs help or we will create a corporate welfare state, where companies aren’t afraid of making bad decisions, because they’ll only get bailed out if they go bankrupt. Why work hard when you can just pull a couple billion out of your nearest government agency?

Now, the influx of cash into the economy will help in the short term. Ideally, people will spend it and promote growth in the economy. However, in the long term, this will hurt, not only the pocketbooks of the American people, but their work ethic as well.

I think it’s easy enough to realize, especially with this quote from James Dale Davidson: “When you subsidize poverty and failure, you get more of both.” Is that too hard to understand? Our entire economy is based on making people work with ingenuity and flexibility. We can’t ruin it by spoiling the ones who fail, and ignoring the ones who succeed.