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Debate Info

16
46
Yes, it is. No, it isn't.
Debate Score:62
Arguments:15
Total Votes:72
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Argument Ratio

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 Yes, it is. (7)
 
 No, it isn't. (8)

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frenchieak(1132) pic



Is AIG "Too Big to Fail?"

Many people have debated on either side of the issue, some saying that AIG is too big to fail, and some saying that it's best for the country if we let it fail.

Is AIG "Too Big to Fail?"

Yes, it is.

Side Score: 16
VS.

No, it isn't.

Side Score: 46

Yes it is actually. People who say it isn't dont understand why we are bailing them out. AIG doesn't just have american holdings. If it were to fail it would send shock waves through the rest of the worlds financial markets. We americans sometimes don't want to consider these kind of things because many of us feel a little to self important, but a global financial collapse would decimate third world countries and developing nations the worst. So do I think we should let them go bust? NO. Should we use anti-trust laws to break up corporations that are "too big to fail"? ABSOLUTELY.

Side: Yes, it is.
3 points

I agree completely. Letting the big banks fail would be a disaster for both America and the world. Ask just about anybody who actually understands the situation and they will tell you the same thing.

Right now the important thing is that we weather this current storm. After that we can figure out how to keep a meltdown like this from happening again. And the solution will probably involve stricter regulations and laws preventing companies from getting so huge.

It makes me nervous that so many are running around like chickens with their heads cut off. Everybody seems to have strong views about what should be done regardless of whether or not they actually understand the situation.

Side: Yes, it is.
bushhaterr(33) Disputed
1 point

We have millions starving, losing there homes, families and jobs on our soil.We are not our brothers keepers. Let the other countries deal with there problems.

Side: No, it isn't.
MisterGuy(1) Disputed
1 point

This is extremely short-sighted thinking. As was stated before, AIG was one of the the largest insurance companies in the world (that was worth around $1 trillion at one point). Allowing that size of a company to fail would have rippled across the entire world, including the USA! You can't just stick your head in the sand & refuse to acknowledge that we live in a global economy.

Should AIG (or any other company for that matter) been allowed to become "too big to fail"?? No way, but we need more regulation for that.

Side: Yes, it is.
Zarepheth(10) Disputed
1 point

AIG Failing would be good for the world. Most of their wealth was invested in phantom investments - things like credit default swaps and similar financial instruments. Letting them fail would cause most, if not all, evaluators of those instruments to value them at zero. This would quickly wipe tens of trillions of dollars of phantom value off the books of a great many companies, individuals, and perhaps governments. When all was said and done, we'd know how much they are all worth and could fix the underlying problems.

Bailing them out just prolongs the inevitable consequences on society while allowing the guilty a chance to escape with their ill gotten wealth and thus avoid the consequences for themselves. Basically it is a case of privatize profits while socializing risk and loss.

Side: No, it isn't.

Well let's just say it's too big to fail because the different parts of the administration won't allow it to. It's is the same with all the BIG banks that have been eating up well sized as well as smaller banks over these past 10-15 years. If and when the giants fail, much goes down the chute with them. What they need to do is break up these monopolizing giants and put some competition and responsible business practices back into place.

Side: Consider the consequences
frenchieak(1132) Disputed
10 points

But everything's going down the chute as it is. And we aren't letting AIG fail, either. So why are we still doing this? What could it possibly hurt now? Sometimes a large failure is needed to keep things right.

Look at AIG now. OK, some say that it's too big. Monopoly and other government business restrictions should have taken care of it, but laws were laxes, as some people say. So what happens when we spend all of this money saving the company? Do we come right back once they're on their feet again and forcefully break the company apart? Seems like a waste of all our money.

Side: No, it isn't.
MisterGuy(1) Disputed
1 point

"So why are we still doing this?"

So things don't get any worse!

"Monopoly and other government business restrictions should have taken care of it, but laws were laxes, as some people say."

Very, very true, but this doesn't change the fact that AIG was "too big to fail". Look, I don't like bailing out these kind of companies anymore than the next guy, but at least the USA now owns roughly 80% of AIG. We should be able to get SOME kind of return on our AIG investment.

"Do we come right back once they're on their feet again and forcefully break the company apart?"

Yes, I hope that's exactly what is done. Also, we can help reset the table in terms of executive compensation at these kind of companies. It's obscene how companies like AIG still pay HUGE sums of money to those that ran those same companies into the ground. This needs to change!

Side: Yes, it is.
2 points

Of course. They went bankrupt, but because they're so big, they were bailed out by the US government. They literally are too big to fail.

And it's a shame. I'd personally like to see them fail, and the banking industry crash. The economy would be horrible for several years, but the banks would eventually come back and they'd be better for it.

Side: Yes, it is.
3 points

It's the one thing I disagree with this administration on so far, though both sides seem to be all about bail outs in equal numbers.

People's money is already insured. They want these banks to not fail, not for the loss of private citizens savings, but for the loss of investments (which are gone anyway) and so that banks can loan for businesses.

But most small businesses use local banks. While many local banks have shut their doors, many were very smart, saw this bubble bursting (miraculously apparently) and are still able to lend good businesses and people with good credit money.

If the banks were "too big to fail" than they were simply too big, and should be broken up immediately.

This is something that, at one time anti-monopoly laws and regulations, would have never allowed to happen, these laws were stripped one by one all through the late 90's and 2000's, now this is the result.

You have another case of special interests, in this case the banks, with undue sway over the officials who are supposed to represent the people. Instead they were representing the few with the bankroll to win elections.

Side: No, it isn't.
11 points

That's how it seems to work. They can say whatever they want to get elected, but when it comes down to it, they know who they're really looking out for.

Side: No, it isn't.

I say we let it fail and deal with the consequences. That way, other companies will think twice about screwing up.

Side: No, it isn't.
12 points

Right. We can't - we being the people that fund the government - go around spending millions, billions, and trillions of dollars fixing the problems of private companies. And even if we tried, we wouldn't be able to help every small business all the way up to every large business. So that would mean the government saves some, lets some fail. Favoring certain companies over others. I don't see any end to this.

Side: No, it isn't.
Cerin(206) Disputed
2 points

I agree. But the question wasn't "Should AIG fail?" It's essentially, "Can AIG fail?", to which they obviously can't as evidenced by the bailout.

Side: Yes, it is.

AIG is not too big to fail. The fundamental principle is capitalism thrives on the concept of profit-loss system. Furthermore, the system is not privatized profits and socialized losses. AIG made some risky loans and gambles, and it didn't pay. So, they should have failed because of bad management decisions in the highest positions. Taxpayers shouldn't be bailing out these irresponsible jerks.

Side: No, it isn't.