Didn’t some of these companies cause the crash? Or at least help it. Feels kind of unfair that they get off scot-free.
What would have happened if the government didn’t bail them out? Would we ever recover?
In: Economics
There is a saying… cut off your finger to save your hand. The theory (or what was sold to the American public) was there were several banks where about to go under (a few like Bear Sterns did) which would have caused a ripple effect throughout the economy. The TARP (troubled asset relief program) program effectively allowed capital (money) to flow through the system when no one was lending because of that panic. The panic itself would have froze money lending and caused more defaults then what we actually saw in 2008.
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