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HappySqurriel on 06 October 2012
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MDMAlliance said:


Even if the chart were to be believed and is an accurate representation, my comment was made to those who make rash statements without even knowing anything for themselves.  The chart also shows that in 2008 unemployment rates increased exponentially fast and stopped its rapid growth around 2009.  On all parts it shows a rather steady unemployment rate rather than a rapidly increasing one.  It seems like there's a trend of the rates going up and down quickly, while it does seem to go up a little, doesn't it at least show some improvement over if nothing were done, the rate could have been significantly higher?  

I personally don't know too much about this, but when listening to certain news sources go on about this, I couldn't help but think that there were always people who weren't counted in unemployment.  This wouldn't have been much (if any) different if a Republican (or another candidate) were the President.

Realistically, the unemployment rate couldn't have gone much higher (at least for any significant amount of time) ...

If the banks were allowed to fail the mortgage backed securities that were "worthless" would probably have ended up selling for a tiny fraction of what their book value was. Small(ish) investors would have bought those mortgages, unwound them, resturctured the principle and interest to ensure that the people who held the mortgage could afford them, and sold them at a profit. The average person would have seen their mortgage payment decline significantly, the credit markets would have began to thaw in 2010 or 2011, and we would be seeing significant growth today.

Instead of this we have Zombie banks which can't afford to lend people money because their balance sheet is full of worthless paper, they can't sell this worthless paper because no one wants an asset that is going to decline in value, and they can't even write off their poor investment because doing so would force them into bankruptcy.

The government spent billions of dollars to make a banking system which was less viable in the long run.