How does bailing out massive industries with millions or even trillions of dollars compared to the general population help improve the economy?
In: Economics
First, most bailouts come in the form of loans which must be paid back.
Second, although it might not seem apparent, goods don’t appear on shelves by magic. Products and services we rely on have to be provided by some organization. There is no point giving citizens money if there is nothing to spend the money on.
That being said, it isn’t a case of either or. The situation is such that demand stimulus (cash to people) and supply stimulus (keeping companies running) are both going to be needed to avoid a long depression.
The government needs to provide cash to people because some job loss and disruption is already happening and will likely worsen in the short run. But doing so is a stopgap – people consume goods and services not money. And goods and services are mostly made by people through companies.
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