Question

The airline industry received $25 billion in coronavirus related assistance from the federal government back in May. The airlines reported recently that travel volume is down 65% since the pandemic started. Given that in the past, certain industries (autos, banks) have been provided with valuable government assistance during trying times (i.e. bailed out), should the federal government now provide additional monetary assistance to the airline industry? Please include your assessment of who benefits and who pays in your response.

Answer 1

I do not think that Federal government should be providing monetary assistance to the airlines industry because this will be an advocation of the principle of "privatizing the profits and socializing the losses" and it will be motivating more companies to take higher risk and unnecessary risk and they will be assured that in any financial crisis times, they are going to be bailed out by the Federal Reserve so it will be leading to a sense of irresponsibility among various market players and they will be unnecessarily taking risk and putting their organisation at high-risk so it can be said that Federal government will be promoting an environment of taking high risk and that can lead to insolvency of the business and wiping out the investment of various retailers as well.

In this system of bailing out of these enterprises, a handful chunk of employee benefits from this bailouts as organisation is saved but these are the the money of of taxpayers which should not be used for bailing out the privatized organisations because these private organisations are never distributing the profits into the society and they are often indulging into such means which are mostly inclined towards tax evasion and tax avoidance,so I will not be advocating for bailouts because it is an indirect cost on the society and society should not be trying to bail out these irresponsible companies who are always looking for privatizing of the profits and socializing of the losses.