[throwaway373438]

I agree that a business folding is a bad outcome. I think the goal is to have the business not fold at all, paying back the investment. Open question how many businesses will ultimately fold or survive -- no way to know yet, right?

[gregwebs]

Even if the business survives there are bad outcomes. Creative destruction does not occur and moral hazard is increased. I agree that there is a huge benefit to society to avoid a wave of mass bankruptcies, but there are huge costs as well.

Purely from the financial side, another way of looking at this is: if bail outs were really net positive then the private sector would handle it. If the government has to handle it, it is a bail out. Governments almost always lose money on bail outs. Sometimes, like the last one, it is falsely claimed that the government made a profit. It probably lost money [1] and we still have 1.9 trillion mortgage backed securities on the fed's books that are unaccounted for in such claims.

I agree that these things are not a 100% handout, but they are most definitely a bail out.

[1] http://gcfp.mit.edu/wp-content/uploads/2019/02/BailoutsV12.p...