I have enjoyed a number of discussions about politics and our current economic crisis over this Thanksgiving break. During those discussions my father-in-law made the observation that those who advocate for allowing this crisis to run its course without government intervention need to consider the implications of that course and ask themselves if they are prepared for the extremes of lawlessness and social breakdown that could accompany a deep depression.
Call me a fatalist, but I am among those who does not believe that our current approach of large and poorly applied bailouts is going to save us from such a depression. It might delay it slightly but I see us falling into the same (or worse) deep depression with these bailouts as I would expect without them. The proper solution to this crisis is to identify and return to solid financial ground. We have to abandon the practices of excessive risk and inattention to the rules of sound business that we have been ignoring for so long. Paul Krigman has a few thoughts in this direction that we should consider.
Whether we we pursue our present bailout course or not, whether we experience a deep depression wihtint he next two years or not (I just invented that timeframe up off the top of my head), there is one thing that is absolutely sure – we all should ask ourselves if we are ready for the social breakdown and lawlessness that can always potentially occur. Whether we ever face such a situation or not it is always smart to be prepared for it.
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