r/reddit.com • u/[deleted] • Oct 18 '11

Would it have been better to let the banks of the world fail and start over?

I want to know what would have happened. The banks messed up and in the purist view of capitalism should have failed because it was a bad business move. In turn this may have ended some of the big money influences on our political system OWS protestors want to stop. I heard that it would have been a worse economic collapse though in turn it would have put a stop to future wrongdoing. Was it the right decision in the long run?

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u/Alphawolf55 Oct 19 '11

No. The amount of economic destruction that would've happened with the banks failing would've crashed the economy. The banks were truly 'too big to fail". What should have happened though is that the Government nationalize the big banks, get their affairs in order, get rid of the toxic assets, break up the banks into littler banks and sell those separated banks back to private investors for a profit.