Bailouts are not the solution to an economic crisis

To the editor:

My hat goes off to Mark Agather (“We must make hard sacrifices to overcome the economic challenges presented by COVID-19,” March 31) for his honesty. I do agree that the sooner people go back to work the better. I even question shutdowns in general as I feel the economic impacts of this will kill or ruin more lives than the virus itself.

But as far as the way this has been handled, I greatly disagree with Mr. Agather as I tend to follow more libertarian trends. In 2006, I watched an investor named Peter Schiff get harassed on corporate news for predicting an expanding housing bubble that would burst in one to two years. According to him, the entire fiscal stimulus throughout the whole Great Depression amounted to about 3 percent of gross domestic product. He also shows that the current stimulus is about 10 percent of the GDP. If true, this makes President Donald Trump the most socialist president in U.S. history.

Even if not true, are bailouts not a form of socialism in the sense that productivity, at least partially, becomes nationalized with a foundation of government funds created by further debt? According to the Bureau of Economic Analysis’ website, U.S. GDP is relative to the latest quarterly reports. Therefore, the current figures are inaccurate as they are from prior to the current situation.

This is an important fact as information from the same website shows that from 2000 to 2017, the service industry made up 77.4 percent of the GDP. This is all relative because our service industry has been mostly laid off now. This means that things could be worse than most think.

As for the stimulus itself, maybe it’s time to say no to bailouts, though that might sound harsh. Most things worth doing aren’t easy, but maybe corporate bankruptcy can be a good thing. Perhaps better businessmen and women will purchase the brands we all use with no cost to taxpayers and run them with much more competency knowing that the bar has been set and the safety net is gone.

Ross Jubert

Libby