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You don't think the Fanny bailout "worked"? We don't have the luxury of seeing what would have happened if we hadn't bailed them out. To make the pro-bailout a
by lacker 18y ago
You don't think the Fanny bailout "worked"? We don't have the luxury of seeing what would have happened if we hadn't bailed them out.
To make the pro-bailout argument more clear, here is one reputable economist predicting that if we had let the FMs default, the dollar would drop about 30% and unemployment would double, in about a week.
http://www.marginalrevolution.com/marginalrevolution/2008/09/could-you-clari.html http://www.marginalrevolution.com/marginalrevolution/2008/09...
- byrneseyeview 18y agoSo it would be like a 19th-century panic/recession, without hard money. He's omitting the part where, since we aren't subsidizing stupid decisions, stupid decisions don't get made and the economy recovers very quickly.
- lacker 18y agoIf only subsidizing nothing was sufficient to prevent stupid decisions from being made!
- ojbyrne 18y agoYou're correct, I was glib. But I think those things will happen anyway - they'll just take longer than a week.