First: I don’t know much about economics. This is not an opinion piece; I am genuinely looking for other people’s opinions, so please comment if you have an opinion on it.
I’m just watching The Love of Money and it was saying how Paulson and Bernanke said to the US government that if the banks didn’t receive a promise of a bailout then the entire banking system would collapse within 48hrs.
If we assume that this was true and the bailout was required, then does it suggest that the concept of a minimalist, libertarian-style government is no longer feasible? It’s my understanding that under such a tiny government there would be hardly any taxes, so how would it ever be able to nationalise so many financial institutions? Even putting aside that nationalising things would be anathema to such a government in the first place, it wouldn’t even be possible.
Or would proponents of such a style of government argue that this crisis would never have happened in the first place without government meddling?
I guess I am asking if lightweight government is incompatible with this global economy that we seem to have?
Technically big government created the situation with poor policies designed for the rich guys at the top to keep getting richer of the most flakey of financial policies.
Seriously though, companies buying up faulted credit and mortgages and selling reselling them to people with even worse credit than before. Did they really expect this to work forever?
And Car companies totally ignoring changing technologies and practices and buyer models towards gas mileage and “going green” until they were at the brink of failure when they should have been legislated to change to lean and green years before? totally asking for a fail
Big government made it, Big government fixed it.
However a small government can make equally as stupid choices and faced with the same situation would descend into bankruptcy and collapse into 3rd world so I would prefer big government to small because the situation can at least be fixed.
Oh by the way, no banks here in Canada fell apart, actually nothing here seems to have changed at all in the last year to be honest, The government gave the car companies here a much much smaller bailout and that was about it….
The thing is, even if big government did enable this problem (I offer no argument for this, just supposing), I don’t see how small government could have stopped it either, because surely small government implies even less regulation?
I’m not even sure that the top earners really would be worse off with small government, I can think of plenty of ways in which they would have even more influence since they’d fill the power vacuum.
In fact taking this further I’m not convinced that a small government could even exist for any length of time before being replaced with corporate overlords or a military junta. Proponents of small government typically say that it wouldn’t be possible as every citizen would be empowered to defend themselves and their friends, but it strikes me that the average human being is pretty suggestible and tends to do whatever they are told is good for them, whether that is by Supreme Exalted Commander or by WAL*MART.
I personally don’t mind the government I don’t see the quality of life being very good without a pretty decent government but for your argument that Small government gets taken over by corporations and militia, Big government is already owned by Corporations in most cases with their funding guiding many policy decisions. This fact is demonstrated by the U.S for example and their almost insane campaign against health care.