I still do not believe that the "sky is falling" claims of the administration and Wall Street is quite true. I do not believe that we will, as a nation, have a depression. Unlike the Great Depression, individual depositors now have explicit governemnt backing of the deposit (at a minimium of up to $100,000). In the Great Depression, when a bank failed, the depositor often lost everything. Second difference is that we do not have a contraction in trade based on government action (tariffs).
What I do think there will be, if they can't get our money, is a depression in certain sectors of the financial industry. Specifically, those that took huge risks, and reaped great rewards, in buying/selling/packaging derivatives. They will be hurt, and hurt badly, if they are still in business.
The question, IMHO, is how the government should protect the general economy, while at the same time not taking on the risks that those sectors of the financial industry took. My thought is that the government should intervene, but it should do so only by making sure that the regulated industries, specifically commercial banking industry, survives. If that means providing funds directly to the commercial banking system, so be it.
I understand that a great deal of financing is not within the commercial banking system. But we have a commercial banking system that has, and can in the future, work well in providing financing. It will be more expensive, but credit and funds will be available.
If we are capitalists, we have to let those who took the risks outside of the regulated system sink or swim on those risks.
