Quote Originally Posted by JaggedEdge

What you are talking about is taking your entire life savings to the casino and placing an all or nothing bet on red-25.

Yes they will risk their businesses because it means going out of business if they don't. Typically business owners are risk takers, some more than others. That is how the free market works. You take big calculated risks in order to get BIG rewards.

If we keep handing out money to them they won't risk their own because they don't have to.
Exactly!!!!

This is commonly referred to as moral hazard. Who cares if my business fails, the government will just bail me out. Who cares if i can't make my mortgage payments, the government will just bail me out. Who cares if my skills are two generations old, the government will just bail me out.

Does anyone here believe businesses would behave in the manor they do (large scale corporate interests) if they "knew" the federal government was not in the business of alleviating failure?

You would have both less risk dependent reward (similar to black market operations), and much much much more innovative reward (creating something new that changes the way people think i.e. facebook/youtube/gps etc...).

Unproductive speculation can be reduced by simply refraining from intervening on behalf of failure.