Which would be better for the long term: Financial system collapse OR banks with no incentive to reign in risk?

Question

It's becoming obvious that the Federal Govt. is going to do whatever it wants (regardless of what the people are requesting). But they are trying to justify their growing power by claiming "the financial system would collapse" if we didn't (insert preferred policy that rewards Wall Street for failure here). And it seems like anytime you question any of these shady policies you are met with a response similar to: That would undermine the program. (The same programs that keep stealing the people's money??)

So IN THE LONG TERM, what would be more beneficial to the U.S. population: Letting a financial system acting stupid collapse OR allow that same financial system to hold your govt. hostage with the threat of a "financial collapse"??

http://www.huffingtonpost.com/2010/01/31/tarp-watchdog-neil-barofs_n_443489.html

The government's response to the financial meltdown has made it more likely the United States will face a deeper crisis in the future, an independent watchdog at the Treasury Department warned.

The problems that led to the last crisis have not yet been addressed, and in some cases have grown worse, says Neil Barofsky, the special inspector general for the trouble asset relief program, or TARP. The quarterly report to Congress was released Sunday.....................One case concerns apparent self-dealing by one of the private fund managers Treasury picked to buy bad assets from banks at discounted prices. A portfolio manager at the firm apparently sold a bond out of a private fund, then repurchased it at a higher price for a government-backed fund. A rating agency had just downgraded the bond, so it likely was worth less, not more, when the government fund bought it. The company is not being named pending the outcome of Barofsky's investigation.

Barofsky renewed a call for Treasury to enact clearer walls so that such apparent conflicts are less likely.

Treasury said it welcomed Barofsky's oversight but resisted the call to erect new barriers against conflicts of interest. The new rules "would be detrimental to the program," Treasury spokeswoman Meg Reilly said in a statement. The existing compliance rules "are a rigorous and effective method of protecting taxpayers," she said.

Answer 1

I just answered this question in another post. Since most of our wealth is based off debt and speculation rather than honest labour and natural resources, a great depression is probably the only thing that can bring our financial system back to something reasonable. But too many people only care about short term gains and reelection to take a hit now in exchange for a sustainable future for our kids. Too many people need their fast cars and deluxe cable packages and home mortgages and fancy clothes and jewelry to give a dam about the next generation or to even care about where their money is coming from.



Every boom and bust has been related to the debt created by our banks, massive speculation by wall street or both.

Answer 2

Neither. Banks should have to hold the risk of carrying a loan for at least a year. Probably 2 years.



Allowing Wall St. to sell these loan as Triple A investments was fraud.



What has the Obama Admin done to go after the people responsible for this.



What, did they all contribute to Obama. Go after these Wall St shysters and the fraudulent mortgage and loan officers.

Answer 3

All BO has done is push this mess down the road. Until they fix the original problem it will re appear.



They should have let the ones that were going to fail, FAIL.



Fix the original problem, unless BO really does not want to so they can mess with it at a later date.

Answer 4

a million. does not sound Capitalist to me. 2. Nope. clarify? particular. maximum folk of the Congress AND Senate have been from 2007 onward held via a huge Democratic majority, who had the all-say on what went via. Republicans accompanied them because of the fact, nicely, needless to say their perspectives does no longer end something, "in case you won't be ready to conquer them, connect 'em". All of congress became fearful of financial give way, so as that they made one huge mistake. final component approximately spending I observed a effective youthful guy submit on right here became "Congress controls the handbag-strings". Bush had to bypass alongside with it because of the fact he had no selection, he became basically an elected figurehead, congress pushing for salvation would desire to easilly override a veto. Ben Bernanke has no experience of morality as we've seen very those days, and Henry Paulson is a banker pawn, who became status up for his corporation. clarification adequate brah?

Answer 5

The way to fix the banking problem is to seize the banks from the greedy zionist jews.

Answer 6

Financial collapse. We are prolonging the inevitable, slowing the recovery and going broke doing it.

Answer 7

By following either of your possible paths the result will be the same.

Answer 8

Six to one, half dozen to the other. The end result is the same.