Quote:
Originally Posted by ar81  So it leaves 3 options of actors that could do something:
1.Government
2.Other countries
3.Nobody does anything
If other country takes posession, then the nation is gone.
If government does not "interfere" (react) then nobody would do anything and things would go in free fall, just like during Bush administration. |
The Bush administration did far from "nothing".
Under Bush, we passed a $700 billion bailout package for banks.
The simple fact is that the market had to crash because it was artificially inflated by unnaturally low interest rates and a massive overextension of credit by financial institutions.
In a free market, the market would crash (like it has), creating a small but severe dip in productivity while loans default, bankruptcies are declared, bad debt is rectified, and the market realigns. Within a year, things would turn around and the market would resume under normal conditions. This is what happened during the recession of 1920.
Instead, the government has pumped vast amounts of credit into the economy to lessen the initial impact of the crash by propping up bad loans and institutions that made those loans. This means bankruptcies will never be declared, bad debt will remain on the books, and the market will not correct itself. Instead, the short dip in productivity will become a prolonged slump as inflation and unemployment stifle the economy. We will see a repeat of what happened in the 1930's, created by a repeat of government actions during that era.