Question
6. In the movie Inside Job it was pointed out that the larger the loan, the larger the commission; therefore, lenders lent excessively, and everyone
6. In the movie Inside Job it was pointed out that the larger the loan, the larger the commission; therefore, lenders lent excessively, and everyone profited for trading the loans, until it came time for the loans to be repaid and there was not nearly enough money to repay them. When it did come time for the debts to be repaid, many of these trading firms had debts that were many times larger than their available funds and were heading for bankruptcy. Many of these firms were then labeled as too big to fail, because they managed magnificent percentages of money in the global financial system - if these firms fell, the global financial system would fall as well, it was said - and thus, many of these firms were bailed out by the government - using the people's money, in the form of taxation or money creation (hidden taxation known as inflation) - amounting in the hundreds of billions of dollars. Explain why, or why not, the bailout was an ethical solution?
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