Posted on 03/25/2020 5:13:36 AM PDT by Kaslin
In theory, you might be correct.
However stepping back and looking at reality, government intervention can prevent an untenable economic disaster.
We live in a republic governed by elected representatives. Those elected have been given authority to act. They did finally act and they determined the government must intervene.
In the legal actuality, you are wrong
“Too Big to Fail” essentially means they are a Government company.
I must be missing something.
The airlines want $29 in grants and $25 in loans that don’t indicate 0%. That is equal to $54B of which the $25 will be paid back from the loan at whatever interest rate determined. So the expenditure for the taxpayers is $29 billion with the loan money coming back with interest whatever that is.
The government wishes to give them $37 in grants, and $21 in a no interest loan that will pay back the $21 at no interest. So the expenditure. That tally’s up to costing the taxpayer $37 billion after the cows come home. I see spending $8 billion less on the top plus the interest coming back using what they want rather than what Uncle Sugar is trying to give them.
I don’t understand what the problem is here? The airlines are actually asking for less than the government is trying to give them overall and more up front. And they are appearing the villain?
Airlines are a source of more than just transporting people. United and American Airlines are two of the top 25 cargo carriers in the world. And each of them averaged around 4000 fights last year. There’s a lot not being said in the article. And her reasoning is flawed and inconsistent with the long term effects of the shutdown created by fear rather than numbers.
rwood
I believe one can borrow from one’s IRA for 60 days without penalty.
Be aware that I think it will be ten weeks before business conditions will generally be normal.
They are a critical part of our infrastructure.
That being said, no more buybacks, they need to have cash set aside precisely in case this happens again (and it will!)
boeing was in huge trouble strategically before covid-19. using covid-19 as cover to give boeing a cash infusion is not very good imho. a cash infusion will not necessarily help boeing and its employees long term. boeing has apparently been doing stock buybacks up until mid 2019. trump has been going soft on boeing recently (1% of the american economy) but even trump can’t reverse the effects of boeing’s bad business strategies.
True but there it is. I have been binging “The Queen”. i think Britain Nationalized their utilities and coal mines very early on and it caused nightmares. Coal strikes, industry closed 4 or 5 days a week because the miners wouldn’t allow coal to be transported. It probably dampened the enthusiasm for “Nationalizing” Industry here.
IIRC there is a Beatle’s song with a reference to “Mr. Heath”.
Yes, it reeks of “too big to fail.”
If I’m going to give Boeing all that money. I would demand the resignation of all corporate officers and Board Members as a condition.
Borrow? No, you can withdraw from it and put back 60 days. Once in a year.
There is a difference between borrow and withdraw.
Withdraw might require selling something, potential for an incalculable loss
The economic reality is I have almost no place I can spend $1500 and won’t for at least 10 weeks.
And the federal government is going to have to cheat people out another $2 trillion in the future.
So if Uncle Sam can give a welfare check to American Airlines then it can give a welfare check to Bernie the Burlington Bum?
Dear Senator Rubio:
My next trip to Europe will cost over $1500....
no
bernie is not deemed a vital economic resource
I lose money every November to the county tax collector.
My neighbor’s cousin is a retired teacher with a $78,000/year pension.
I don’t see one airliner in the sky.
I guess airlines are as vital to economic life as Bernie.
Just as the Interstate Highway system was planned by President Eisehower as the National Defense Highway System. Old enough to remember that signs identified various sections as Defense Highways in the early dsys of construction.
Only give them money if they make the seats bigger with more legroom.
“I don’t understand the Boeing bailout.”
Airlines cannot pay for those 737 MAX aircraft when the Max is released. That’s about $100 million an aircraft and I believe 380 are waiting delivery.
I’m in the same boat. We get none of the benefit of the tax preference for employer-provided medical insurance, but we bear the burden of all the market distortions caused by it. We should absolutely be able to deduct our health insurance.
Also, Obamacare is a disaster for the self-employed—Congress either forgot we existed when they wrote it or wanted to punish us for voting Republican. Either the whole thing needs to be repealed (my preference) or there needs to be an amendment allowing the self-employed to buy group plans. We got a group plan when my wife left her employer to join my practice, but we basically had to manipulate the books and exploit a loophole to do it.
A tax-advantaged “rainy day” fund would make a lot of sense, too, though I think it should just be combined with retirement accounts. Just allow us to withdraw from our IRAs without penalty during a declared disaster and some other defined occurrence such as a recession or a specific decline in earnings, and increase our allowed contributions.
The bailout of the airlines should help that, though the problem the airlines are facing is also self-inflicted. They racked up large debt ordering new airplanes and used their record profits to buy back stock - over $14 billion for American Airlines alone over the past two or three years. Hopefully the bailout contains a prohibition on future stock buybacks until the federal loans are paid back.
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