This is certainly a very interesting concept and I agree that it would be nice to not have to bail out company’s that fail, but if you look at banking, the industry that coined the “too big to fail” phrase, I think you will find that several of these measures have already been taken. Some have worked and some have unintended consequences. First there is a threshold for “too big to fail.” It recently was relaxed from $50B in assets to $250B in assets, providing regulatory relief to many banks. Companies that cross this threshold must hold a certain amount of reserve capital and submit to stress-testing to regulators, among a host of other provisions. When the threshold was $50B, many banks close to that level — for example People’s United — would avoid growing to not have to submit to regulatory requirements after crossing $50B. And you do want banks to grow to keep injecting liquidity into the economy. Also of note, the corporate tax rate was recently reduced in President Trump’s tax bill. Now, agree or disagree, when the corporate rate was at 35%, many companies stashed their taxes elsewhere, which resulted in a loss of tax revenue for the US. Overall, I think there needs to be a balance. I don’t want the taxpayers to have to bailout malfeasant companies, but we may have to live with the fact that some things are too big to fail. Take the US debt. The US could never truly default on its debt because the dollar is the world reserve, although there are certainly consequences to not paying debt owed, which the US is already seeing. I think a better solution would have been jailing more of the malfeasant bankers that were responsible for the great recession and not letting them hide behind their companies, who paid fees and walked away.

Full-time journalist and Content Strategy Lead at GoingVC writing about business, the economy, startup culture movies, sports and much more.

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