deLongs Q&A: What if markets never recover, the assets are not fundamentally undervalued, and even when held to maturity the government doesn make back its money?
Then we have worse things to worry about than government losses on TARP-program money–for we are then in a world in which the only things that have value are bottled water, sewing needles, and ammunition. I am profoundly disturbed that he has to engage in this hand-waving. I endorse the alternative: don’t hire the bastards, throw them in jail, nationalize the banks, and (possibly) declare the obligations illegal. There are a number of variations; I lack the knowledge to choose among them. But the fact that I have Paul Krugman as a co-signer gives me more confidence than I’d otherwise have. I really think Dr. deLong needs to engage Krugman’s points more directly to make me feel good about this. Why should he care whether I feel good? Damn if I know.
Related Questions
- deLongs Q&A: What if markets never recover, the assets are not fundamentally undervalued, and even when held to maturity the government doesn make back its money?
- How does the federal government’s assistance to the financial markets through the Troubled Assets Relief Program (TARP) affect the budget?
- What steps are being taken to recover the assets held by Lehman Brothers Inc ("LBI")?
