Do you people know what happens when the biggest banks fall over like dominoes?

Liquidity becomes a huge issue. Some banks have money but they're afraid to lend it. Some banks have small reserves and need deposits to lend (note: thanks to the government, they can lend 10x as much money as they have at their disposal, but they still need some capital of their own).

That means loans are next to impossible to get.

Good, you say, let people pay for things instead of borrowing money.

You know who needs loans? Farmers need loans when there's a bad year so they can survive until next year, because their usual income is barely enough to survive. The little mom&pop shop down at the corner needs a loan when the weather's terrible for the whole winter and their business runs into the red, so that they don't have to close. The guy who fixes your cars needs a loan when two of his workers suddenly quit and he has to train new people and his razor-thin margins evaporate overnight. The lady who wants to start a small business out of her house needs an extra $5k in start-up money to make it happen.

And you, my friends, you won't be able to get the house you want without perfect credit and a huge amount of money down. Your credit is slightly less than perfect and you're being hammered with rent that's higher than a mortgage payment so you can't save up money to put down. You're stuck in a downward spiral.

Then your car breaks down completely and you need to buy a new one, but you don't have the $20k right now. You're like most people and your credit isn't perfect so you can either get a loan at predatory rates or no loan at all, so you somehow make it without a car... you and millions of other people. The auto industry starts tanking.

So now you have no car, rent that's too high, food prices rose, and you're stuck in a downward spiral.

Or you allow the government to LEND money to banks to make sure the public considers having money in the bank safer than under the mattress. Sure, volatility is high, but people get the loans they need to make life happen.

And yes, this is a point I think people miss. The money was lent. If you do a tiny bit of research, you will see that repayment is happening. Take a look at http://projects.propublica.org/bailout/main/summary . Allow me to summarize:

• $580B total in two separate bailouts ($411B and $169B spent)
• $245B loaned to banks in general
• $169B loaned to Fannie and Freddie
• $80B loaned to the auto sector
• $68B loaned to AIG
• $16B used to purchase toxic assets
• $2B other

So how's the repayment coming along?

Returned from the general sector: $278B or just under 68%. Revenue from the general sector (interest, etc): $39B.

Returned from F&F: 0. Revenue: $28B. Housing is obviously on much shakier ground. Also keep in mind that many banks that got bailout funds were essentially forced to take them in the interest of stability.

So now you're armed with two bits of data. First, allowing the banking industry to fall is disastrous (read: great depression). Not just for them fuckin rich people and CEOs who get $30m severance pay, but for the every-man who has a business, for you and me when we want to buy something we don't yet have money for, and for everyone who wants to sell something so expensive people usually take out loans to buy it, and for everyone depending on those people and so on.

And second, bailout funds are not a gift. They may result in a significant government write-off. But it sounds a lot better to say that we lost $700B than it is to say that we're currently short $235B but will likely recover a large portion of that money... and may even swing to a profit (thanks to dividend and interest payments, and so on, from the banks). That's right: there's a non-zero chance that the government will directly profit from the bailout.

I know it's popular to say FUCK EM BANKS LET EM FALL but please use the intelligence that I'm sure you all have to think about what will actually happen. And read your history to see what has historically happened.