Insurance exists to compensate victims of unexpected loss. If we accept the principle of ultimate insurance, or too big too fail, or lender of last resort then this creates a moral hazard.
If taxpayers are paying for banks and other large corporations when they are bailed out after making poor decisions, then I can understand how they feel entitled to ask to be bailed out when disaster strikes them.
This is the kind of dilemma that occur in societies which expect government to solve all their problems.
It's a good example of the unintended consequences that governments create and is why I oppose bailouts in favour of encouraging private charity and voluntary community acts of compassion.
The response is framed around moral hazard and the role of government
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