THERE IS NO UPSIDE
There is a lot of cry in the interventionist crowd about the terrors of privatizing gains and publicizing losses. Well no shit. If the government were good at making money it wouldn’t have taxes. The results of the government trying to absorb the profitable parts of troubled companies would result in the lowering of value of those assets. Individual gains across the board are supposed to be the goal.
Update: Yes, broad view, the costs are covered by everyone who owns us dollars. However, also broad view, I would rather reap the benefits of individuals spending more money than the government having more money to waste. You want stability? Nationalize the bankrupt banks. Hand out the profitable parts to other companies that have been responsible, and print dollars to pay off the “troubled” liabilities. Companies that behaved badly are disbanded, good assets retain their stability and mismanagement is not rewarded. Of course there is heavy inflation but then we’ve achieved “stability”. Seriously, I think uncertainty of government action is the biggest current modifier to the crisis.