According to news reports, a number of companies have decided that they would rather close their doors for the year rather than risk going through the rigors of an economic recession. This is especially true of the large companies which are most susceptible to the shocks brought on by such things as natural disasters, terrorist attacks and even market turbulence. In many cases the reasons given are simply that the company wants to free up resources for the development of new products and/or services.
The economy will recover in the coming years and the key is for companies to be prepared to help protect themselves and their own interests by laying off a significant portion of their workforce. However, as we have seen recently a large portion of these businesses go under. This means that companies need to realize that they cannot count on government bail outs to keep them afloat.
It seems to me at least that some of these companies should have been rescued instead of deciding to go under. They should have been left alone to recover their operation instead of deciding that it would be better to shut down. If you really want to protect the American economy, you have to make sure that these businesses either continue to operate or else get a small loan from some private investor. As things stand now, the only real solution is for the Obama administration to step in and provide some additional funds to the economy in order to stimulate business back.
Some of these companies have already gone under because they were unable to continue to survive even with the additional funding. An important point to remember is that there is no such thing as free money. Government loans and other financial schemes just won’t work. If you believe that a bailout is coming, you are likely to lose your shirt as the company no longer has any cash to pay payroll and it has no assets to secure any new loans. As a result, the company will shut down.
In the end if you feel that you need a bailout to keep your business afloat you are likely to be disappointed. The fact is that most economic bailout programs don’t work. If you are lucky and the president’s stimulus package lands you a few billion dollars you could walk away. Otherwise, you are going to be left holding the bag for the businesses that don’t get the assistance they need.
The point is that there will always be businesses that go bankrupt. These businesses may not look like they are going to fail any time in the future. However, they are going to fail eventually. You can either be one of the lucky ones who saves a company that is about to go under or you can be one of the unlucky people who helps cause the business to fail. It is up to you to choose your actions carefully.
