Too Big to Fail – Subsidies and Cutting Salaries and Wages

I wonder if the President and Congress have considered the inconsistency in their plan to limit the wages and bonuses of those employed in industry. The government has taken the position that some companies are too big to fail and therefore should be subsidised by the American taxpayer and salaries and bonuses should be limited.  Without considering the merits of such a policy and its result to the company and America, the government has apparently not considered what happens if salaries and bonuses are reduced? You got it – more money is left in the company. The companies, by undeniable logic,  now get bigger – more money retained “in house” makes them bigger – and now they may no longer be “too big to fail,” but they may be ”too super big to fail” and the government has done this all on its own by its misguided policy.  Now – if the government wants to prevent this so the companies are no longer “too big to fail,” the companies should pay out more money as salaries and bonuses, and if enough is paid out, the companies may no longer fit the definition of being “too big to fail.”  I think this would be a win-win situation. Think about it – my conclusion is logically correct. As usual, the government is doing everything backwards.

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