Why is Capitalism failing in the USA?

Question

I'm curious to know why in America our Capitalist system is failing that we are being reduced to have more government involvement? It would only make sense that if Capitalism was the BEST system of government and produced the most effective outcome, then we wouldn't be in need for more social and government control. However, this is seemingly not the case as more and more government involvement has been shown to be apparent. Wouldn't we be all better off right now if Capitalism was succeeding rather than under employed and financially strapped?

Answer 1

Capitalism failed and we abandoned it during the late 19th, early 20th century. Now the word is just used as a talking point.



Consider that Capitalism can be defined as an economic system in which 1) the means of production are privately owned and controlled for private profit; 2) all decisions regarding production are made by owners in the free market; and 3) profit is distributed and control exercised by owners in proportion to their investment.



Want proof. In 1840 we abolished indentured servitude. In 1868 we abolished slavery. In 1869 we mandated an eight hour day. In 1890 we agreed that the government could break up companies which promoted restraint of trade. In 1890 we enacted a corporate income tax. In 1934 we abolished child labor, agreed workers could unionize, be paid for injuries, securities and exchange, fair labor standards etc. etc.



I submit that as the government is entitled to a 35% share of the profits of every business, it is not completely privately owned, but 65% privately owned. It is operated for profit, with the proviso that it must be operated in accordance with the above and numerous other laws and regulations. Finally, much of the profit is distributed to the government and many CEOs who are paid enormous bonuses based on profitability, not to owners.



So what we have is neither capitalism nor socialism, but a Mixed Free Market Social Democracy.

Answer 2

As another answer pointed out, capitalism is not a form of government. The US has a democratic republic as its government. Capitalism is an economic system based on profits flowing to the owners of capital and with most capital being in private control. We do not have a purely capitalistic system as there are areas of government involvement in the economy. Some government involvement improves the market/capitalistic system by providing for fair competition, equal regulation so that good companies don't have to compete with bad ones in an unfair way. Government also provides a framework for currency and financial transactions. We have had periods of less government involvement, but have chosen through democratic means to have more. I think this is partly due to the increasing complexity of the society and the complex market system that creates winners and losers. Since we don't always approve of the outcome, we involve the government. The current state of the economy is typical of the cycles found in capitalistic systems. The boom/bust cycle was even more ruinous when we had less government regulation in the 1800s. I'm not sure if the answer now lies with more government or less government, my guess is that a certain amount of regulation of the financial sector could have prevented the worst abuses that helped to make this last recession worse.

Answer 3

Capitalism is an economic concept, NOT a form of government. America has never let true capitalism work. The federal government has always interfered with corporations' operations to the point where true capitalism is impossible. Laws like Minimum Wage Laws, Minimum Age Laws, and OSHA regulations along with extremely high taxes hinder the success of anyone except the government which never pays the costs of the failures it causes.

Answer 4

Capitalism is not a system of government. It is a natural system of economic reality. When fair laws prohibit fraud and punish the breach of contracts of free people. It is a fair and equitable system. When it is distorted by any force that allows breach of contracts freely entered into to be bypassed or over ruled or for special advantages made by authority of law then the nature of the system becomes corrupted. So to look upon capitalism as a failure is fallacious, for the failure is in not allowing capitalism to address, by way of the free market rules the consequences of it's own contractual obligations.

Answer 5

Capitalism is an economic system not a system of government. Just thought I would let you know.



Anyway, I really doubt anybody on here can tell you why exactly the economy is failing at the moment. Most economists didn't even know that the economy was going to go into a recession about 5 or 6 years ago or so, and now you want some half wit buffoons on Y!A to tell you what the problem is?

Answer 6

Well in a capitalist government the people must work hard for money in communist no one cares unless you are the government. So we are failing because the people are getting to used to freedom and aren't working hard as a child to adult. I am going to be a politician shooting for presidency and frankly the people are like the governments child and we are becoming spoiled in general. Kids only realize life is hard when they're grown and that there wasted. So then the government is trying to teach a lesson by taxing us and getting more involved. So picture leaving your kid alone for a while, ya they might fend for them selves and learn a few things on adventures of there own but eventually they'll get to spoiled (free) and do what they want.(not pay taxes or work hard in school or follow the law) if the newer generation will work hard we will succeed in making a total capitalist country.(be completely free) So teach your kids to work hard and people wouldn't need those of the hierarchy trying to control them.( the government taxing and interfering with civilians. It's too late for the government to do much but the people must control them selves to be free from their chains.(we have to guide our children right and expect the best out of them)



America will suffice but only with the people guiding us forward.

Answer 7

Capitalism is not failing, it is the attempt to move this country into socialism that is creating these problems. Tell the government to get the hell out of the economy and things will get better. They should have let GM fail, and should have never gotten involved with the mortgages.... "fanny & Freddie" there will be plenty of drones here that say it was Bush...... bla blah blah...... the fact is that this started with a democrat controlled congress and has moved into hyperspeed with obummer-boy.

Answer 8

Also, if you think about it, the government competes a little too. Best example is the post office. If it were a private business, it would not longer exist, but we are forced to pay tax dollars to keep it afloat.

Similar is the public school system including public universities, and will soon be health care.



Government cannot even get charity right. The welfare system is too easily abused and in fact encourages people not to work.



I could go on and on.

Answer 9

It is not failing. Government is growing as a result of those on the left believing that it is the responsibility of the US government to provide a host of social entitlement programs that are failing in Europe and leading to austerity cuts in nearly every member state and in England.



Capitalism is not a government system, it is an economic model.

Answer 10

capitalism is not failing.



we don't need more government control. capitalism is not the reason for growing government. its like the founders said:



"wherever there is freedom, people will want to take it away".



and capitalism is not a system of government as you say.



but it has created the most wealth, and highest standard of living in human history.

Answer 11

Because we don't have true capitalism. We have a system where they privatize the profits (so the rich get richer when things are going well) and socialize the losses (so all of us have to pay for it when things aren't going well). True capitalism would have allowed all the financial firms to fail instead of being bailed out.

Answer 12

We would be much better off, but when you are not able to let it keep working without getting hit with friendly fire (I really can't say about the friendly) from the Left, you get setbacks that become harder and harder to smash.



Quick opinion, I believe if our Fore Fathers could be here now, they would be crippled up crying in shame. seeing their country in the shape it.

Crying for all the lives lost in war, for things not to go in this direction.

Answer 13

Capitalism hasn't been in practice in the US since Wilson was president. What we have is a mixed system that is failing because government's control of the economy has ceaselessly increased throughout our history.

Answer 14

abuse. Greed gone wild. I wish people would stop talking about social programs that they themselves are probably on in 1 way or another. If capitalism was so groovy we wouldn't be in this financial crisis. The rich bankers got out of control & the gov't. HAD to step in & save the rest of us (altho' the unemployed surely disagree). They just want to feed their children before the rich rape them anymore.

Answer 15

Because we now have a president who prefers socialism over capitalism. But this is a temporary set back. In 2012, after Obama has gone away, Capitalism will once again thrive.

Answer 16

Liberalism mixed with Communism/Socialism, with a touch of Gorege Soroism````````````````````````````````````````````````````````````

Answer 17

The only reason capitalism is failing, is because we're making the mistake of getting the government more involved.



It's only when we don't let it do what it needs to do that it fails.

Answer 18

Why turn a profit if tax breaks and foreign income makes up for the lost revenue? Ever hear of a loss leader? The tax extension that just passed has breaks for corporations that invest overseas.



New tax law packed with obscure business tax cuts

http://news.yahoo.com/s/ap/us_tax_cuts_goodies

There is a generous tax break for banks and insurance companies that invest overseas.



An exemption that allows banks, insurance companies and other financial firms to shield foreign profits from being taxed by the U.S. through 2011. Cost: $9.2 billion.



That's pretty funny. Americans can't get a loan at home but American banks are free to help the economy of countries other than America. We're extending tax breaks to companies that create jobs outside of the U.S. But not here. Obama tried to stop that and the Republicans took issue with that idea.



America may have the highest "TAX RATE" but after all those tax breaks no one pays anywhere close to it.



Why your tax bill is higher than GE's

http://articles.moneycentral.msn.com/Taxes/Advice/why-your-tax-bill-is-higher-than-ges.aspx



GE got a 1.1 BILLION dollar refund. On revenue of $157 BILLION. A company has $157 BILLION in revenue but pays not a dime in taxes?? That's some break. Can I get one too??



"But the tax benefit of overseas operations is the biggest reason many multinationals end up with lower tax rates than the rest of us. It makes sense that multinationals "put costs in high-tax countries and profits in low-tax countries,""



Not ready for that 'adult conversation' on debt?

http://www.msnbc.msn.com/id/40573747/ns/politics/



CBO predicts that by 2016 interest payments will be larger than military spending. All that interest is because of UNFUNDED tax cuts. Meanwhile corporations are reporting record profits.



Americans have screwed themselves right into the ground. China is doing phenomenal thanks to our propensity for cheap goods and no taxes.

Answer 19

It is BECAUSE of government interference that capitalism struggles.



Highest coroprate tax rate in the world.

Over-regulation

Overly litigious employees



Corporations have to make a profit to survive. If they can pull a better profit from sending jobs overseas than here in the US, then it makes sense that the jobs go overseas. I agree that CEO salaries are outrageous especially when compared to the average worker...but that is up to the shareholders to address and not the government.

Answer 20

Capitalism has to have a hangover for every boom it creates. The government is messing around because it gives it popular support.

Answer 21

Capitalism is the turd of economic systems. Only communism will rescue this country from downfall. When the Republikkkans take over the Congress and defeat Obama in 2012, their destructive government will help usher in the revolution. Then it will be payback time.

Answer 22

Cause Mr Hand says that we don't practice capitalism in this country bro. We practice corporatism.

Answer 23

It's not. It's the Socialism that's failing here.

Answer 24

FDR, Wilson, JFK, 0bama, Clinton, Bush, Reagan, etc. etc.

Answer 25

Because socialist progressive liberals have been in control of regulations and unions.

Answer 26

Because with capitalism, big business's only concern is profit , with no concern for people and their well being. We the people of the US need protection from the greed of business.

Answer 27

Because it's no longer privatized and because of that it's more profitable to have everything overseas.

Answer 28

Time, no country can last forever.

Answer 29

I would guess that someone capitalize on it...

Answer 30

it is growing more than ever

Answer 31

you can blame Obonga for that commie shi*t

Answer 32

It's not. Thanks