slightly MarxistThe system finally collapsed because the lenders got a little too greedy. I am not eager to bail them out by promising them even more of the future productivity of workers, in the form of today's government dollars to cover immediate losses, and tomorrow's government dollars to pay off the debt that financed today's government dollars.
Note that I'm perfectly happy to pay rich folks back on government debt if they're financing actual Keynesian spending today, which would help get the economy growing again. In that scenario, growth causes the debt to shrink over time relative to the economy as a whole -- the rising tide actually lifts all boats.
But I find it absolutely ridiculous that we are allowing the ultrarich to lend money -- at interest -- in order to finance paying off themselves, to make up for stupid risks they should have known better than to take. This basically has them taking money out of one pocket, handing it to the government, then grabbing it back and stuffing it in a different pocket, and charging our posterity for the privilege of having momentarily held the money.
Anyone who complains about efforts to use progressive taxation to redistribute wealth has missed the fact that the current distribution only exists because of a fundamentally unsustainable system of policies that was intentionally designed to concentrate wealth, and which has collapsed because such concentration leads to an insufficiency of demand relative to potential output. The poor can't afford to consume, and there aren't enough rich to pick up the slack.
