Jubilee Year

Why Banks Want the Old Bailout Back

Your arguments read like a series of fallacies and fantasies:
-the debt problem of buying toxic assets is not a serious problem if the economy starts growing again. [Yeah, that is a mighty important “if” there, isn’t it?]
--hyperinflation is a not threat because hyperinflation occurs when there is more aggregate spending than aggregate output, which you cannot foresee [And worldwide gov’t quantitative easing in worldwide economic contraction is what, exactly?]
-- Protecting banks from further losses is important because if banks have the uncertain loss overhanging, they will not lend [Banks won’t lend because of the certainty of deflation, making all loans guaranteed losers. Buying their bad assets won’t stop the deflation.]
-Depression is avoidable, because we have had fewer and shallower recessions over time because the quality of monetary policy has improved over the years [Hmmm, where have I heard this: “Past performance is no guarantee of future results”? And what about the role of that monetary policy in creating this problem, fashioned by the very people still in charge?]
--We need circuit-breakers in the system. If a circuit breaker could prevent a house from being engulfed in flames, why do we keep saying that the fire is inevitable. [Agreed, but a little late for short circuits when the house is already on fire, isn’t it? The short circuits were there, but were removed years ago.]