The argument is if we do not pump credit into the economy, people will stop lending and we’ll have another Great Depression.
Our current monetary system is the cause of this- and it needs to be changed. But if we don’t do something, won’t the consequences be drastic?
lol
No. There is no credit crunch, there is no liquidity crisis. Bob Higgs pointed this out repeatedly. Some banks and investors made bad businness decisions largely due to gevernment intervention and want themselves saved at public expense.
Where will the money ultimately come from, in one form or another? From the American people either by way of decreased loans because banks have less loanable funds or by way of taxation or any other number of ways. What would happen if we let these companies fail? There will be more of a market share for other companies to pick up, increasing demand at a smaller number of firms, and increasing the willingness to drop the price. If the government were to remove their head from their butts they would realize that deregulation will encourage the markets to self-regulate and price lower, causing less grief/more spending/more money within the financial markets allowing them to prop themselves up.