OK, folks. We all have bailout fatigue. Some of us are bothered more by irresponsible borrowers and others are angry at the banks. We’re sick and tired of being asked to bail out those who have failed.
So let’s do a thought experiment here.
What happens if the US government literally does nothing more to stem the losses.
AIG’s recent request for money? Denied.
Citigroup’s plea for a capital injection? Nope. Maybe nationalization – add Bank of America too.
General Motors and Chrysler want another loan? Fugetaboudit. Liquidate yourself.
Homeowners underwater on their mortgages? Sorry, take your lumps.
So, what will happen if we give in to bailout fatigue and tell all of these supplicants “No.”
Would the economy rebound anyway?
Would capitalism as we know it die?
Would the markets tank and tailspin and descend into a slow depression?
Use comments to offer your prognoses.