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How does the "debt ceiling = responsibility and Bernanke's insistence that Congress should have the perpetual freedom to grow the debt to infinite and not be restrained by "symbolism"" if it has always been raised by Congress and Presidents of BOTH parties?

What would have been the impact on "your kids" had the financial sector, through the wiping out of trillions of dollars of derivatives, been allowed to fail and not "bailed out by TARP which has been substantially repaid in full?

I agree with you on the "half-baked Keynsian policies' and have never said otherwise. Again, that was all Obama and Congress. If you don't believe in Keynesianism what sort of economics do you believe in and what is the proper response to a deflationary spiral? TIA.......

1) I get that reasoning, but currently the ceiling has been a political football with spending going through the roof. "The People" see this $16 trillion with their own assets going down and not any cuts in sight. When the debt was resonbly managable during all kinds of economic activity in the 80's, the ceiling went up 17 times (During the Reagan administration). Like I said most people were not paying attention which was a huge mistake, many are now though (Also during GWB term where many on this site were against the raise). 2) TARP was another exercise in Federal spending where the government was allowed to socialize the loses, i.e. and example of another Keynesian Fallacy of taxing/borrowing undermining the free market. I have yet seen any cut/benefit given directly to the tax payers, only more stimulous. Also, the credit scare, this guy's retort went hardly notice during the scam:

So what's special about banks? According to what I keep reading, it's that without banks, nobody can borrow, and the economy grinds to a halt.

Well, let's think about that. Banks don't lend their own money; they lend other people's (their depositors' and their stockholders'). Just because the banks disappear doesn't mean the lenders will. Borrowers will still want to borrow and lenders will still want to lend. The only question is whether they'll be able to find each other.

That's one reason I feel squeamish about the official pronouncements we've been getting. They tell us bank failures will make it hard to borrow but never that bank failures will make it hard to lend. But every borrower is paired with a lender, so it's odd to state the problem so asymmetrically. This makes me suspect that the official pronouncers have not entirely thought this thing through.

In the 1930s, a wave of bank failures did make it hard for borrowers and lenders to find each other, and the consequences were drastic. But times have changed in at least two relevant ways. First, the disaster of the 1930s was caused not just by bank failures, but by a 30% contraction of the money supply, which is something today's Fed can easily prevent. Second, as any user of match.com can tell you, the technology for finding partners has improved since then. When a firm wants to raise capital, why can't it just sell bonds over the web? Or issue new stock? Or approach one of the hedge funds that seem to be swimming in cash? Or borrow abroad?

I know, I know, the rest of the world is in crisis too. But surely in the vast global economy, it should be possible to find someone capable of introducing a lender to a borrower. (Note that I'm not talking about going to foreign lenders, though that's another option. I'm just talking about the same American borrower and American lender who would have found each other through Bear Stearns finding each other through Barclays instead.)

In other words, I'm not sure these big Wall Street banks are really necessary, and I'm not sure we'd miss them much if they were gone. Maybe there's something I'm missing, but if so, I think it should be incumbent on Messrs. Bernanke, Paulson and above all Bush to explain what it is.

http://thecurrent.theatlantic.com/archives/2008/09/not-buying-it.php

One more point, because of the "housing crash"/debacle which reared its ugly head, thus had mad scientist calling for TARP and other Fed gov "projects", inflation became a boogyman and the massive liquidity mad scientist have pretty much retarded savings with their rates/emphasized banks to only slowly lend.

Fun part will be when the glorious Reservist will sell assets in order to absorb up the excess reserves if (Are allowed) banks to pick up the loaning practices if this "fragile recovery" lol, love the blessings from the Treasury, Helicopter Ben's newsspeak btw, starts breaking/businesses need more "liquid" (All these new taxes/health care crap might brew a perfect storm).

These witch doctors you promote never learned anything from the late 1920's/FDRs "reign". Just more evading the Free Market, thus another round of bad theories leading to bad conclusions, leading to more spending, leading to more debt. Nail in the coffin would be, like I said, banks beginning to increase a substantial volume of loans/lending which will unleash inflation (Not sure if the current aroma of deflation right now is better, lol, take your pick).