Would it have been cheaper to bail out the financial sector or subsudize the recovery

  1. I've been wondering if it would have been cheaper to bail out the financial sector and prop up the mortgage system that was created by the failed financial sector, or would it have been cheaper to help those who lost their jobs stay on their feet until the market shifted to fill the gap?

    Not an easy question I know.

    You can't take the governments moves over the last 10 years for face value as you have to consider the political implication of every move they make.
     
  2. jcsd
  3. Last edited: Mar 6, 2012
  4. russ_watters

    Staff: Mentor

    Re: Would it have been cheaper to bail out the financial sector or subsudize the reco

    That link is out of date and it is worth noting that most of the financial "bailouts" are more accurately described as loans or investments. The difference being that the government expected at least some of the money back. TARP, for example, had a projected cost as of a year ago of $19 billion, despite having laid out hundreds of billions of dollars. http://en.m.wikipedia.org/wiki/Troubled_Asset_Relief_Program

    Now of course direct subsidies may pay back too, but even if they do it takes longer and is impossible to determine with any precision how much.
     
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