4 ms·
These enormous debt relief loans wouldn't feel so bad if they'd just stop doing it over and over again. When a plane crashes or any other engineered system fai
by sown 16y ago
These enormous debt relief loans wouldn't feel so bad if they'd just stop doing it over and over again.
When a plane crashes or any other engineered system fails, analysis is (supposed to be) carried out and we try to make it so that it doesn't happen again.
When economies crash we loan them out and never really analyze or try to correct what made that crash happen, or at least that's the way it seems.
- borism 16y agothat's an imperfect analogy. No economy (besides Iceland and Latvia perhaps, and even they haven't defaulted yet) has crashed so far. All are having engine problems though. What those bailouts are doing is buying some time before the crash, so we can hopefully restart engines or glide to a safe landing. That's the phase we're in now. Unfortunately I'm not very optimistic that our flight crews can still manage to save us.
- sown 16y agoOK, I see what you mean, but if what I understand is correct about the 2008 situation, we just narrowly avoided a crash and there's not enough real change to prevent it from happening again, at least here in the US.
- varjag 16y agoIs there any indication that anyone's going to restart engines?
- deleted 16y ago[deleted]
- anamax 16y ago> What those bailouts are doing is buying some time before the crash, so we can hopefully restart engines or glide to a safe landing. That's the argument for doing the bailouts. The reality is probably that they're just delaying the inevitable and making it worse. And that trillion dollars is money that we won't have to help pick up the pieces. To put it another way, the bailouts are like giving an alcoholic another bottle of Jim Beam. Yes, it stops their jitters now, but they'll soon be even worse off than they are now.
- borism 16y agooh, that argument is getting soo tired... even though I agree with it on some level. you see, capitalism is based on confidence. lose confidence and you lose everything. buying time helps to restore confidence. does it make system more stable? no. but it helps to prolong system's life. it's like Ponzi scheme - we need to keep it running, because when it stops... or do you have a better idea?
- anamax 16y ago> that argument is getting soo tired The relevant question is whether it is correct, not whether it is "tired". > buying time helps to restore confidence No, it doesn't. At best it delays the time when confidence is lost. In reality, it increases the cost of that loss of confidence. (And, it's not confidence, but this message is tedious enough.) > do you have a better idea? Yes - take the hit as soon as possible. It costs less then and you haven't spent much trying to avoid it. Win win.
- varjag 16y agoFrom now on and until it stops working, Western elites are going to toss billions of pretend-money at any major economic problem. At some point though it'll stop working. Perhaps it would be better for the West to live through market crash and sovereign defaults now, while it can afford it, than a decade later?
- tumult 16y agoI'm not convinced anyone actually understands the economy, so there might not be anything to analyze.
- deleted 16y ago[deleted]
- CWuestefeld 16y agoThe worst part is the moral hazard. We're signaling that there's little reason to be responsible, because there's always a bailout to fall back on. We're thus increasing the need for such bailouts in the future.