The US government decides to bail out Chrysler, as President Jimmy Carter offers the automaker $1.5 billion in support.

Government bailouts are widely criticized because they potentially reward failure, encourage excessive risk taking, and unfairly reduce competition. Yet, if a “too big to fail” company is not aided by the government, then the economy could suffer a major hit.

On this day, January 7th, in 1980, the US government decided to bail out Chrysler, and President Jimmy Carter offered the automaker $1.5 billion in support.

In the bill, Congress required Chrysler to find private financing for the $1.5 billion since the government was co-signing the loan and not simply handing out funds. The Chrysler bailout was seen as necessary because it was the number three automaker at the time. Yet, Chrysler required another bailout just three decades later in 2009.