by Claudio Grass
The Rationale for Interventionism
It has been almost eight years since former U.S. President George W. Bush warned the world that “without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold.”
[…] The government’s response to the crisis was a USD700 billion rescue package that was supposed to prevent U.S. banks from collapsing and encourage them to resume lending, which was soon to be followed by a series of Quantitative Easing (QE) packages injecting money into the economy.
The rationale for this government intervention was that it would boost spending, restore confidence in the market and reignite economic growth to everyone’s benefit – but has it succeeded in doing so?