I hear a lot of anger, but so far the arguments I’ve heard against are as lame as the arguments for.
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How about this:
1. By bailing out the very institutions that caused this mess, these speculators will feel entitled to take more risks in the future…the “moral hazard” argument.
2. We will need to preserve our resources for the deflationary debt destruction that’s coming, because it will be getting progressively worse (and will likely accelerate as we approach the bottom). We will need to backstop the FDIC, SIPC, PBGC (and other retirement accounts/funds, to an extent) and insurance companies, as well as job programs and domestic/national defense.
3. I am not necessarily opposed to deficit spending or attempts to ease conditions as we move through these tumultuous times. My opposition is to giving money to those who created the mess, and to prolonging the recession/depression by trying to keep asset prices (housing, stock, fixed income, etc.) artificially inflated at the taxpayers’ expense.
We need to allow asset prices to fall and the monetary base to contract so that we can cleanse the system of destructive debt and rebuild our economy from the ground-up,
