>If we socialized gains and privatized losses (in the sense of never bailing out those agents that got themselves into bad situations), these cycles would at worst be much less severe and frequent.
You should look at the severity and frequency of economic cycles around the world throughout history and I bet you'd reconsider this position. Often times they lead to the collapse of entire nations or worse, war.
Is that worth it to teach an overleveraged business a lesson? Remember, "businesses" don't make these decisions in a vacuum; they are run by and consist of people. People win and people lose in every cycle (just not always the same or most deserving groups).
You should look at the severity and frequency of economic cycles around the world throughout history and I bet you'd reconsider this position. Often times they lead to the collapse of entire nations or worse, war.
Is that worth it to teach an overleveraged business a lesson? Remember, "businesses" don't make these decisions in a vacuum; they are run by and consist of people. People win and people lose in every cycle (just not always the same or most deserving groups).