Why the Bailout is Bad for America
From Dan Mitchell at Cato:
• The bailout is bad for the economy.
• The bailout repeats the mistakes Japan made in the 1990s.
• The bailout will increase corruption in Washington.
• It rewards executives and companies that made poor choices.
• The bailout will encourage imprudent risk in the future.
Bottom Line: When government tries to redistribute wealth from rich people to poor people, it causes economic damage by discouraging productive activity by the most successful and by discouraging productive activity from those who are lured into government dependency. The proposed bailout is even more pernicious. It would redistribute wealth from poor people to rich people, and simultaneously encourage reckless behavior by recipients and impose an immoral burden on those that behaved responsibly.
HT: Don Boudreaux