The natural process of evolution is basically that the beings that best fill each niche in an ecology will survive. This ensures the overall health of the system. When natural systems become out of balance then diseases, parasites and other radical agents of evolution enter the ecology to stabilize the whole system. Artificially propping up one failing component of an ecology only ensures ongoing infiltration of these radical agents of evolution and only delays the inevitable natural selection process from occurring in a timely and appropriate manner. Denying that financial natural selection should be allowed to occur is just as ignorant as denying that human industry is polluting and negatively effecting global climate. You cannot deny the process and succeed, all you can do is delay it and pay ever increasing costs for this delay. Propping up banks that should have been allowed to fail is and was a plan of only delaying their eventual destruction.
I think that the bank bailout in 2008 was one of the biggest crimes and travesties to ever happen to the United States of America. We would have been so much better off if we had just let the banks fail. It would have hurt more initially, but would have ended up being better.
I would expect for those that have made bad investments to take those investments and simply accept the loss. We live in a capitalistic society, and while I support taking care of those that cannot care for themselves, there is absolutely no reason for us to have bailed out a bunch of millionaires that had been living it up off of a system that they were rigging to collapse.
I was a stupid kid in my early twenties back in 07 and 08, and even I saw the writing on that wall.
Most of the money given to the banks was used for bonuses for the very people that created the problem. Besides making rich people richer, what did the bail out actually accomplish? Better to have let them take the hit and see what would have happened. That's my opinion on the matter.
Yes, I do believe we should have let the banks fail back in 2008. Propping up certain banks because they were deemed "too big to fail" created a set of false incentives for banks to continue making risky investments. If the banks know that the government and ultimately the taxpayers will step up to bail them out, then they have no real incentive to try to make wise investments. They can simply try to go after the ones with the highest returns.
Most multimillionaires hold their savings in the markets not in the banks, damaging the middle class not the upper class. This loss of savings would have created a panic to rival what happened during the great depression. For over a decade(30's) the government didn't step in (to a large enough degree), and the economy flat lined as a result. This wasn't changed until WW2, which offered an unprecedented stimulus to our economy. Today, without the bail outs millions more would have lost their savings and/or their jobs, causing a depression instead of a recession. We live in a mixed economy, not a capitalistic society. Our government has to power to minimize losses, and I think it needed to do so in the situation.
While a certain incentive has been created by deeming that some banks are "too big to fail," the alternative to not bailing them out would have been devastating to the U.S. Economy. If a bank like Bank of America collapsed millions of people would loose their deposits. These financial failures would fall back on the U.S. Government by way of the FDIC and FSLIC. All the accounts that failed would be reimbursed by the government of up to $100,000 dollars. Result number one would be an indirect bailout of the people that lost their money in the failed banks. But far more serious than than would be the lack of confidence that the average citizen would lose in America's banks. Before the Federal reserve was chartered, banks opened and failed regularly because of bank runs that led to economic disaster. Banks are more than just a place to store money, they are necessary for stable economic growth. If the public were to lose faith in the security of banks, our entire economy would shrink, in other words, we would experience another great depression. By bailing out the banks, the Fed made sure that people could still be confident in where their money was held and stopped a panic that could have led to another depression.