I think I understood this post by Jim Manzi (on The American Scene, posted last Thursday). Does that mean it's too simple?
Though school has gobbled up most of my time this week, I've gotten the distinct impression that what's going on in the wider world is pretty wild: some sort of high-stakes wire-walk at the highest levels of the economy. Manzi sums up several reasons why the government's current maneuvers are dangerous, and then offers the counterbalance:
“Against all of this we have one huge consideration. If investors lose confidence in the safety of money market funds, mutual funds, demand deposit accounts and the other storehouses of value in the modern economy, we would have a problem that would make somewhat higher taxes and moral hazard seem like child’s play. Trust me – you do not want to experience a full-scale bank run in contemporary America. I’m not sure how many people realize how close we were to the wheels coming off at about noon yesterday, as major commercial-paper processing banks like State Street lost 30% – 60% of their value in about 2 hours. Want evidence: When was the last time you heard of the U.S. government identifying a problem, developing a multi-hundred-billion-dollar program and announcing it within about 48 hours?”