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Comment by programnature | Hacker News Reader

There are a lot of exciting opportunities to restructure things that have sucked for a long time. This is a good thing.

However, your logic doesn't make any sense. A bank can be totally solvent, but be wiped out by a bank run due to forces outside of their control. Similarly plenty of otherwise profitable businesses can be wiped out when the entire economy heads south. This is called throwing the baby out with the bathwater.

What I am expecting in governance that doesn't dig us into a deeper hole.

By the way, the worse the US economy gets, the worse the world economy gets. Do you really want a nuclear pakistan/india go off the deep end?

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That's not true, at least not in the US. Solvent banks can access effectively unlimited liquidity from the Federal Reserve in order to prevent bank runs. http://en.wikipedia.org/wiki/Federal_reserve#Lender_of_last_...

On the other hand, investment banks (which are legally different from banks) can be wiped out by runs very quickly if they take on too much leverage. Or at least that's what used to happen before the federal government decided the largest ones were too big to fail and bailed them out.

The banking system isn't solvent if people can lose their money based on competing on-demand claims to the same cash. I honestly don't know why we don't shift to a time-deposit system. It would work nearly exactly the same in every way and we wouldn't need an FDIC as much or worry about bank runs.

Some of the apparent sight deposits already have some clauses that make them more like term deposits. I.e. I read the fine print on my savings account and that talks of certain limits and (mild) penalties for withdrawing too much money at once.

When the entire economy tanks, sure, it's going to take some businesses with it. There's a difference, though, when your business is so reliant on the poor choices that got us into this mess that it goes out of business practically over night when everyone finally realizes, "Wait, this isn't working anymore." The auto companies aren't much better off; the best was, what, 6 months to survive without a bailout?

There will be collateral damage. That's just part of the deal. As I mentioned, this is a global event so yes, I realize the worse the US economy gets the worse the World economy gets, at least relatively speaking. I would prefer that one of the nuclear countries not go off the deep end and trigger a nuclear war, but I have no reasonable belief that they will either.

Actually, from what I have heard/read (i.e. http://www.cnn.com/2008/POLITICS/12/11/congress.auto.bailout...) about the proposed bailout, was that it was meant to keep the companies afloat until March-ish. Without, the outlook is a lot grimmer than 6 months, given March is more like 3-4 months away.

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