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Why doesn’t the government just write a check to individuals and let them spend the money instead of bailing out companies in most countries?
by 1cvmask 7y ago
Why doesn’t the government just write a check to individuals and let them spend the money instead of bailing out companies in most countries?
- ajross 7y agoOne rational reason is that there's a desire to preserve the state of the economy to speed the eventual recovery. Writing checks to a restaurant to keep its staff employed (but idle) vs. writing checks to the employees is the same from the perspective of the employees. But it also means the restaurant is going to fail. Opening the doors of an idle restaurant at the end of the lockdown is a lot cheaper and more efficient than starting up an entirely new one. A less rational reason, of course, is that the policymakers writing the bailout laws tend personally to be more affiliated with and sympathetic to business owners than employees. There is some of that too.
- sleepychu 7y agoPaying for fish v.s. paying for fishing rod maintenance. The idea of the aid is to preserve the economy so it can go back to generating product not pay the rent for the next few months on individuals houses.
- ativzzz 7y ago1. Many businesses are closed at the moment due to lockdowns 2. During a recession, people will save that money and not spend it
- nerdponx 7y agoIn addition to the other replies: it's less costly to keep businesses solvent and just have them re-open and re-hire people in the near future, than to have a huge amount of businesses collapse and then have to start everything over again. In the USA at least, the government did write a check to individuals (below a certain annual income).