| > In the case of the depositors, they put their own money into an account and want to be able to spend that money to pay their employees. Their own money. Well... aren't these mainly venture capital based startups? It's not actually the money of the startups but rather the money of the VC funds. So the situation is more similar to student loans than you portray it. In fact, the ideas behind VC startups and student loans seem very similar. In both cases, you have people who lack capital — the startup founders (some of whom are as young as students and may even be students) and the students — and people who do have a lot of money — VC funds and the government — give them money in the hope that it'll help these people make money in the future and pay back the investment. > It might easily cost the government even more in lost tax revenue if the thousands of companies cannot make payroll due to a banking failure, thus forcing them out of business and their employees out of their jobs. That's an argument to bail out every failing business. Why this one in particular? Why not every one? Anyway, it's not the job of the government specifically to maximize tax revenue. If the government needs more tax revenue for some reason, they can raise the tax rates. But interfering directly in the free market is not the way to do it. Bad businesses are supposed to fail. It's morbidly funny how many people rail against socialism until they're the ones in need of assistance. > In the case of students, they borrowed money that was not theirs, spent it and don’t want to have to repay it. This is a very one-sided description, making it sound like the students stole the money. There are two sides to every loan, the borrower and the lender. The lender in question here was the US government itself. The government lent the money to people who could not afford the loans and who had no collateral for the loans. In other words, without regard for the ability to repay. If a bank did this, the bank would go out of business. But then by your own argument, there ought to be bailout. ;-) > essentially punishing those who did repay their debts How so? > the many, many more who didn’t go to college Forgiveness of student loans is not a punishment to these people. The punishment was the high college costs and society's requirement that job seeker have college degrees. Both debtors and non-debtors are punished by this situation; they just suffer the punishment in different ways. > encourage lenders to be a bit more judicious You're missing the part where the lender is the government. These are direct government loans, which is why the government has the power to forgive them. The government cannot forgive private loans. |
No. They literally sold pieces of their businesses for that money.
The equivalent for students would be if instead of borrowing the money, they signed over a percentage of all future earnings for the rest of their lives.