Why would government privatize economic "profits" and socialize "losses"?

Question

Doesn't this also interfere with "True Market Driven Capitalism"?

Answer 1

Hmm... I wonder of having someone else take the loss has anything to do with it.  It gives a whole new meaning to, "Other peoples' money."

Siggy

Answer 2

A collapse of  large financial institutions has ripple effect in the real economy, so taxpayers are better off saving them with tax money than letting the system fail. This was recognize in the great depression  so regulations were put in place to prevent large scale bank failures. However these have been weakened over that   last 30 years  and we are faced with a financial meltdown like we experienced in the 1930's. It is not fair to bail out the investors who profited from risk taking and caused the problem but it is better than the alternative. Banks have always played  heads I win tail you lose with the public, and bank failures or "panics" were responsible for the majority of economic recessions and depressions before WWII

Answer 3

Because Congress would like to hide the fact that they have put taxpayers on the hook for the losses of companies like Fannie Mae. It's  persuing socialism, put refusing to call it that because the government doesn't actually OWN the company's stock.