467,000 more jobs lost in June.

[Avinash_Tyagi]

TheRealMafoo said:

Avinash_Tyagi said:

The problem with your idea is that letting banks and companies fail could create not only widespread panic among consumers and investors, it could also create a chain reaction where failures occur like falling dominoes, especially where comapnies are related to one another through contracts or supply chains or debt.  You'd probably also see most of the surviving banks and companies start retrenching heavily worried that they could also get swept away.

In a lot of ways your idea was what they did at the beginning of the great depression, letting banks fail, didn't work out so well, as it spread even to healthy banks.

Where were your complaints about the debt when Reagan and the Bushs were pushing it into record territories?  Funny how you start complaining now about the debt.

Where was I when the Bush was pushing us to recored debt? Screaming at the top of my lungs along side you. You just didn't notice. Now that I have the same issue with the guy you like, you notice.

And no, it would not cause wide spread panic. If you look at the markets (an indicator of consumer confidence), the markets went up every time something bad happened, like when GM filed, and when Chrysler filed.

A good analogy would be this:

let's say you have 30 people held hostage by a man with a gun, with 6 bullets.

How long they are held hostage represents how long we are going to be in recession. The longer the man stands there with a fully loaded gun, the longer none of them will move. As soon as he has shot 6 people, what do you think the other 24 will do?

 

Once they know the problem is over, they will not cower in the corner crying, they will take action, and take down the guy.

 

Put a little more trust in people. The faster we can hit the floor of this thing, the better. The worse it gets, the more resolve Americans have.

 

The worst thing we can do for the recession, is making it last longer. There is no advantage to make it fall slower.

 

And the "dominos" you talk about falling, are falling anyway.

Perhaps you missed those thousands of points the market lost last fall when this was starting, and how the market plummeted when the bailout was first time defeated in the house?  You say there was no panic, the only reason we are stabilized at the moment is because of the government intervention, when the market was panicking last fall and winter.

Actually things aren't falling that much at the moment, what we have a concern of right now is things remaining stagnant where they are right now, 10-12% unemployment is expected, but if there hadn't been any intervention by the government last fall and winter, we could be looking at unemployment much higher than what is happening.