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
Its a common misconception as to what the bail out actually was. It wasn’t free money, it was a loan. The banks took the money and paid it back with 10% interest. The precarious state that the big banks were in made it too risky for any other entity to loan them that money, so in that sense getting the loan from the government was a bail out, but the money was paid back with interest. The reason the government didn’t just let them fail was due to the downstream impacts it would have on the companies that rely on investment banks to do business (which is basically every major company in the Country).
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