Post
Topic
Board Economics
Re: Will bailouts become more frequent?
by
jaysabi
on 26/08/2020, 21:21:18 UTC
1989 - savings and loans bailout
2008 - banks bailout
2020 - covid19 bailout aka wall street bailout

bailouts get bigger every time. But will they become more frequent?? Do we need more bailouts to bailout the aftermath of the previous bailouts?


Three data points is hardly enough data to make a point, let alone extrapolate it into anything meaningful.  Bailouts are generally bad because they take the consequences for irresponsible behavior out of the equation.  They also skew the economics of investment and risk/reward.  The people who want bailouts are those who have a lot to lose, so bailouts invariably favor the richest people in the economy while destabilizing the currency for the rest of us.  Bailouts should be a measure of last resort, but "too big to fail" is now a permanent part of our lexicon to the detriment of us all (except the billionaire class).