Originally Posted By: sinij
Originally Posted By: Derid

If the market had been allowed to correct naturally, and the "too big to fail" had been allowed to fail - the immediate correction would have been harsher but we would have been able to have a real recovery and not be still sitting here waiting for the other shoe to drop.



This was tried during Great Depression, only this time around there isn't Great Britain empire and Hitler's Europe burning through all reserves to wage war. US without WW2 would probably still be suffering from Great Depression well into 50s.



Its interesting that you bring that up, because FDR was a Keynesian extremist who attempted all sorts of bailouts and stimulus.

Hoover raised taxes to extreme levels. The overall response was very interventionist.

None of it worked. The country suffered for a decade under the type of remedies that the left proposes today as panacea.

As far as bailing out the actual banks, well the situation was completely different in terms of the way the acute problem was structured. But the fundamentals of inflationary monetary policy and malinvestment in a bubble economy are shared as underlying causes.

All the banking bailouts have done is kick the can down the road, and ensure that the next crash is even more devastating.

For who could be free when every other man's humour might domineer over him? - John Locke (2nd Treatise, sect 57)