We have just witnessed a massive market failure where millions of individuals made the wrong investments, underestimated risk, and went too deep into debt. These were people with very specialized knowledge and very particular perspectives. Often they were gambling their own money and their own life.
The solution that is clamored now from all sides is for the government to spend, spend, spend. And cut taxes. So the solution, it seems, is for the few agents, that happen to have been elected into a position of centralized and bureaucratic power, with their all too limited knowledge, and their all too inflated budget of other-people’s-money, to, all of a sudden, make lots of investments, with disregard to risk, and going deeper and deeper into debt.
How is this a solution again?