Senator Bernard Sanders has created a bill that ought to have the support of both liberals and true fiscal conservatives: The Too Big to Fail, Too Big to Exist Act. The bill would require the Secretary of the Treasury to compile a list of financial service companies that have “grown so large that its failure would have a catastrophic effect on the stability of either the financial system or the United States economy without substantial Government assistance.” The government would then be required to take action to break up these big companies into companies small enough that their failure would not create an economic doomsday. As a result, no bailouts of financial services companies would needed in the future. Companies that took outrageous risks and failed would be allowed to fail.
Liberals ought to support this bill because it would diminish the extraordinary influence of huge corporations over our political process and prevent future programs of corporate welfare. Fiscal conservatives ought to support this bill because it would re-establish true free market conditions, ending the artificial constrictions on market activities that occur when government money supports risky investments.
How many senators will actually support the Too Big to Fail, Too Big to Exist Act? That depends upon how many senators are willing to be ideologically consistent, event when their ideals run counter to the interests of powerful financial corporations that funnel huge amounts of money into political campaigns for public office.
I would not support it because I don’t support breaking companies up.
What I do support is auditing the Fed. We need to do away with the Federal Reserve and the FDIC and fractional reserve banking.
How would doing away with the Fed and the FDIC prevent the failure of “too big to fail” companies?
Because the Federal Reserve causes the business cycle. Inflation is also government-endorsed fraud.
It’s another way for government to steal money from the people.
If the Federal Reserve causes business cycles, what caused business cycles before it was established?
There really wasn’t much of a business cycle before the Federal Reserve. There was at least some degree of the business cycle though because the banks still only kept about 3-5% reserves. Back then though we still had bank runs, and banks still had the ability to issue their own banks notes so these banks were not immune to currency flow.
That business cycle was nothing like to day. We Fed spent over 22 trillion in bailouts to keep the economy a float, and these bailouts are only going to get worse in the future.
So ya fractional Reserve banking itself is kind of the problem.
Whether we go back to open banking or switch to closed banking are the two solutions.