If the government does nothing, you have to consider the losses the country will face. Sure the economy will eventually right itself, but at what cost?
Are we ready to sacrifice an auto industry or a banking system in order to "make things right"?
How many people should be forced to live in poverty because of other people's mistakes?
The situation is not as cut and dry as some would make it out to be. I'm not sure of a solution, but I am positive doing nothing isn't the answer. At least not for the millions of Americans that will lose jobs if that is the course we take. It's really quite complex from what I've read and the un-American Republican party isn't helping anything by forcing their Reaganomics on the package. As if tax cuts mean shit to people without jobs.
The thing is, you cannot mix free market capitalism will socialism. These hybrid systems do more bad than good.
The science behind an economy is that production and savings bring about prosperity. Of course there will be economic downtrends in the business cycle as that is the natural behavior of an economy. With every five years of growth, a period of two years of decline should exist naturally for an equilibrium between markets to form. The United States has seen a period of growth for decades through a declining production economy that has transformed into a services and consumption economy. This cannot be sustained.
In 2001, we should have had a blunt recession, but instead, the stupid Central Bank lowered rates allowing even more borrowing and spending, delaying the serious downturn in the economy the country needed. These actions delayed the problems and made this sub-prime collapse worse than it needed to be. Not to mention the fact that the sub-prime bubble is only the tip of the iceberg. These problems were caused by the government and the Federal Reserve, not the other way around.
Fast-forward to today, where we have already seen about $1 Trillion free fall into oblivion in October, something that will come back to haunt us. What should happen is these companies should FAIL as they are firms that are not successful, so that more legitimate banks and firms can take over for them. This is the whole essence of capitalism. One firm that is not efficient and competitive dies, so a competitor takes it place. But what we have here is the government deciding who fails and who stays in business while not understanding why these fucking morons got into the problems they have in the first place.
Whether we like it or not, business cycles will run their course. The more the government tries to delay the inevitable, the worse the economy will become in the long run. We have seen this through the Great Depression, the Weimar Republic, Nazi Germany, and even Japan.
Printing money only causes inflation, something this country cannot handle with our massive debt. Mark my words.
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