Supporting the banks helps the rest of the economy. Plus, with the banks afraid of risk and lacking cash, banks have little capacity to lend money. Without those loans, the pace of growth in the global economy slows substantially, and may even go into reverse.
Answer:If the Federal Reserve would have bailed out some of he banks the economy wouldn't have taken a hit so hard because banks are the foundations.
Explanation:
Lets start with what bail outs do.
The government created a number of other programs to help the nation weather the Great Depression. While these initiatives were not bailouts, strictly speaking, they provided money and support to create tens of thousands of new jobs, principally in public works.
