To be fair, government bailouts are not just free money the government gives large corporations with no attached expectations. When the government bailed out GM, for example, the treasury gave GM $52 billion. $6.7 billion was considered a loan (with interest) which GM has since paid back. The rest was an investment resulting in a 32% ownership of GM by the US Treasury.
It would be terrible for everyone involved, not just the economy but also for quality of life. Bailouts are bad, but not bailing out is worse. So what do we do? (Sorta) simple, legislation the prevents the amount of risks that banks are allowed to take. My proof is by counter example. The great financial crisis of 2008 was due to deregulation, mainly pushed by Regan era policy. Limits on banks force them to take their due diligence with each loan and decreases the risks of bubbles (crypto, housing, coins, etc.) forming in the first place.
On top of this, there is arguably avoidance of a huge negatives impact on workers in GM and elsewhere. So not only the shareholders who were benefiting. And even within shareholders there are regular people, pension funds, etc. Some bailouts make sense.
No bailouts make sense ever. If you really want to give free money to people just give it to them. You don’t need to make sure that their shitty employer is still shitty tomorrow.
To be fair, government bailouts are not just free money the government gives large corporations with no attached expectations. When the government bailed out GM, for example, the treasury gave GM $52 billion. $6.7 billion was considered a loan (with interest) which GM has since paid back. The rest was an investment resulting in a 32% ownership of GM by the US Treasury.
There’s also a shit tonne of people and other businesses that rely on a company like GM.
It would be terrible for everyone involved, not just the economy but also for quality of life. Bailouts are bad, but not bailing out is worse. So what do we do? (Sorta) simple, legislation the prevents the amount of risks that banks are allowed to take. My proof is by counter example. The great financial crisis of 2008 was due to deregulation, mainly pushed by Regan era policy. Limits on banks force them to take their due diligence with each loan and decreases the risks of bubbles (crypto, housing, coins, etc.) forming in the first place.
On top of this, there is arguably avoidance of a huge negatives impact on workers in GM and elsewhere. So not only the shareholders who were benefiting. And even within shareholders there are regular people, pension funds, etc. Some bailouts make sense.
No bailouts make sense ever. If you really want to give free money to people just give it to them. You don’t need to make sure that their shitty employer is still shitty tomorrow.