You do realize that people "paying us to hold there money" is money that we have to pay back at some point right?
This question is insulting. He asked about interest on the debt, I responded with a point about interest on the debt.
@Interceptor - I don't think you support your position or address mine. You're making a tautological argument that the US gov't is lender of last resort and therefor needed to make loans of last resort. Doesn't show that these loans were useful. I think the forbes analysis on money, and again you haven't shown any of the assumptions, observations, or analysis in the article are wrong.
That's your prerogative, but I don't agree with the assessment. I feel as though you are not accurately accounting for the potential disaster of a global financial collapse.
Also re: GM - GM doesn't fit your category of "critical financial institutions" regardless of macro environment. You might at least try to reconcile your own analysis from earlier in the thread.
GM is no AIG, but the over-arching rule applies: the federal government has a responsibility here. An orderly bankruptcy was the best solution, but it required financing that nobody was willing to provide, so the government had to step in. There were more than just jobs at GM at stake, there was also the supply chain to take into account, which could have taken down even the relatively healthy Ford.
Completely false - Great Depression was a period of the most intensive gov't intervention ever. Read Amity Shales' Forgotten Man for a good historical discussion of the variety of intervention. Price controls? Wage controls? Forced nationalization of companies and utilities? Etc. etc.
You give me grief for Krugman, and you bring up Amity Shlaes? I'll see this and raise you Ben Bernanke.
Or using a language other than English
Is this entirely necessary?
Yes we've seen the movie before, and we're seeing it again. Get ready for 1937.
I've been getting ready. Simultaneous spending cuts and tax increases are just around the corner, sure to throw us back into recession just like in 1937. Although maybe this time, we've learned something.