Bailout is a dirty word.
The Merriam-Webster dictionary defines bailout as "a rescue from financial distress."
So it is accurate to call the $1 trillion-plus package being debated in Congress a bailout.
But let's not call it that this time.
During the 2008 financial crisis, after the world economy was brought to its knees, the federal government had to prop up U.S. banks despite their destructive behavior. Hundreds of billions of dollars of taxpayer money flowed into the financial system to prevent a total collapse. Millions of people lost homes, jobs and their livelihood. An entire generation is still trying to come to terms with the repercussions of that time.
Even in general use, the word bailout isn't associated with anything positive. But since the financial crisis it has acquired a truly negative meaning. It stirs up images of greedy businesses acting recklessly, enriching themselves, and then asking the government for money.
The coronavirus is not the fault of businesses
But let's be clear. This time, the business community bears no responsibility for the coronavirus, the suddenness of its appearance and its spread. Companies, large and small, are not to blame for the millions of people who are losing their jobs, the mortgages and rents they will not be able to pay, or dreams being cut short.
In fact, this time, the government bears responsibility. Local and federal governments have asked businesses like bars and restaurants to shut down. Travelers from Europe and China have been banned, hitting the airlines hard. California, New York, Michigan and Indiana are among the states that have asked only essential businesses like grocery and pharmacy stores to remain open. Dozens of towns, cities and counties have similar local directives. People are being asked to stay home to keep the nation safe from the virus.
The economic rug has been suddenly pulled. In such a situation, it is not unreasonable for businesses to expect support from the government.
Front of that line are airlines, taxi cabs, cruise operators, hotels, restaurants and tour bus operators. Then there are countless retail stores, big and small, in malls that have shut down. What about salon owners or the hot dog cart outside the museum? The list goes on and on.
When payments are due
Just like people, business owners have rent to make, equipment leases to pay and invoices to settle. They have interest payments coming due on loans. Most have short-term lines of credit they draw down to buy supplies and such.
If they can't make these payments, companies will be in default. That could hurt their ability to borrow in the future and even ground their business forever. More workers will lose their jobs. The economic downturn could end up being a lot more severe and long lasting.
So everyone is waiting with bated breath for this economic package. Congress is right in taking the time to ensure it doesn't become a feast for the undeserved or greedy. No one wants large businesses to take taxpayer money and enrich shareholders or line the pockets of CEOs, rather than use it to save jobs and keep businesses afloat.
But let's not call this government package a bailout.
Let's call it a rescue. It's much-needed support that the American economy needs now.
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