How does bailing out massive industries with millions or even trillions of dollars compared to the general population help improve the economy?
In: Economics
If some big industry goes bust it often has huge knock on effects.
For example if airlines go bust this will make it harder for hotels, if they go bust it makes it harder for restaurants and shops that rely on tourism.
If these all go bust it’s a lot of people suddenly out of work with no obvious way to replace those jobs.
That means that they’re spending a lot less which causes further job losses.
The idea is one big cash injection to stabilise an industry can prevent this and then later the individual weaker businesses in that industry can be allowed to collapse.
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