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Big To Fail The Phrase "Too Big Essay

¶ … Big to Fail The phrase "too big to fail" is a term used to describe certain institutions that are so large, interconnected and significant to the American economy that their failure would be disastrous. Because of this perception American public policy has evolved into government support for these institutions when their frequently poor management, greed, and risk-taking behaviors put them in jeopardy.

A partial list includes: Fannie Mae, Freddie Mac, AIG, General Motors, Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, GMAC, Chrysler, Goldman Sachs, Morgan Stanley, Bank of America subsidiaries (Countrywide), U.S. Bancorp, Capital One, Regions and SunTrust.

The issue of taxpayer funded bailouts for institutions deemed too big to fail is one of the most controversial subjects that can be brought up. Bailouts for U.S. automakers like GM and Chrysler can at least be credited with saving jobs of U.S. employees. By preventing massive layoffs, bailing out these too big to fail companies kept additional people from being unemployed and further crippling the U.S. economy. Unlike...

financial system. Just as we expect the government to protect us from external enemies who threaten our national security, we also have the right to expect that our government will stop financial institutions from blowing up our economy.
Given that our elected officials don't have the spine to pass legislation to break up companies that are too big to fail or to stop them from ever growing to that point, at the very least, they have an obligation when passing out our tax dollars for bailouts to set conditions for companies to receive bailout funds. Any company applying for corporate welfare should be willing to be held accountable for how they spend our tax dollars. To their everlasting shame, the Bush administration gave billions to banks, but never considered demanding that bonuses be curtailed…

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