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Moral hazard. Why would anyone waste money planning for something that could make the business fail, when they know there will be trillions in bailouts? We'll
by fennecfoxen 6y ago
Moral hazard. Why would anyone waste money planning for something that could make the business fail, when they know there will be trillions in bailouts?
We'll solve the problem eventually, I guess, when it becomes clear that there's no money left for bailouts.
- overtomanu 6y agoMoney will never run out. Government will just print more money resulting in inflation and other problems. Most of the currencies are free floating and are not backed up by something tangible like gold.
- fennecfoxen 6y agoOh, sure, money itself may conjured such that it never runs out, but the ability of the government to tap the economy's output is definitely finite. If you start just conjuring money to bridge the gap, you're basically robbing whoever holds money (or other financial instruments denominated in your currency). These parties then work very hard to stop holding money. When that process is done, you're back where you started, only with less trust, higher transaction costs, and elevated risk burdens depressing output across the economy.