First the US is essentially bankrupt because the FDIC cannot cover the cash owed.
This is easily handled. Congress declares that FDIC insurance covers up to $1,000,000 per account. Then prints as much money as necessary to cover it. After all, we had no concern, whatsoever, about quietly printing a trillion dollars last week.
The you have all the International banks failing, because their balance sheets are all intertwined.
Yeah, maybe. Maybe not.
Products and services do not move internationally or domestically.
I'm not at all sure about this. I mean, if I'm the Saudis who need to sell oil to keep things rolling, I'm going to find a way. But buying American for a while might not be a bad idea.
Then you have no loans whatsoever for the majority of companies that work on a line of credit, nobody works on self finance anymore, so you have massive layoffs which cause a massive reduction in spending and massive strains on an already bankrupt government, which causes massive layoffs which causes ...
What about all those people who were paid off with the money printed to pay off FDIC deposits? Is all that money going under the mattress?
This is business, Darwin-styled. Survival of the fittest. The most agile. The most adept. The most creative. And to some extent, the ones with the money.
Those businesses which cannot adapt will be left in shambles or dead. Too bad. For all I know, my businesses may get killed in the slaughter, I don't know. But you have to have shakeouts from time to make business healthy in the long run.
There is no evidence to suggest that government can print enough money to solve this problem, and these idiots like Romer who ridiculously claim that printing a trillion dollars isn't inflationary are just adding to the problem.
There is painful surgery ahead and it cannot be avoided. Let's get on with it. |
