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
When a business is really important to your economy, it sometimes makes more sense for the government to save it than to let it fail.
You might spend a billion dollars to save a business, but if you let it go bankrupt then you’d lose 2 billion dollars in economic activity. The bailout costs you less money than doing nothing.
Yes, these banks caused the crash. They knew they were taking an extreme risk, and their gamble failed. If the government didn’t bail them out, all of the banks close. An economy can’t function without banks.
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