Well as you know, I disagree. A "meltdown" would cause certain businesses to go bankrupt. The ones that should. The ones which are criminal ponzi schemes, the ones which are irresponsibly overleveraged, the ones which have fundamentally faulty business models.
And the healthy ones would expand to take their places. And new ones would take positions as well. Both of these phenomena would result in hiring. And we wouldn't have to mortgage our future, and our kids' futures, to reward the criminal and incompetent. As we're doing now.
And why are we doing that? Because the people who engineered this disaster are still running the show. I'm talking about Wall Street more than Washington, although this shoe fits in more than one town.
BTW, I just did the math on the drop to date:
1,576.09 October 11, 2007 (S&P500 record high)
Today's close: 770.05
We are at 48.85% of the high.
I understand the point about some businesses going out because they have bad business models and good, healthy businesses staying. The problem with a meltdown would be the toxic businesses would take out many secondary and tertiary businesses with them, just as a matter of supply/demand. At some point in that meltdown a tipping point would be reached on unemployment where the "healthy" businesses would also be fully involved in the depression as the margins would be so reduced that they could not function profitably.
I think the difference is what I consider the end game of a meltdown. At the end, there are NO healthy businesses to succeed. Everyone has to dig out from ruin. Good companies will come from that but until that point there will be an Economic Scorched Earth that would be global. Since we no longer have a manufacturing base in which to rely on for expansion and growth I would suspect that the Economies that rise from the ashes afterward would be those who do. A very new world order would be the result.
You don't see it often but there are times where ALL AVAILABLE OPTIONS are bad
. At that point you have to take the best of the worst and work with it to succeed. We might end up spending a couple of TRILLION bucks. That will seem like nothing if we allow a meltdown to occur.