[Geisterde]

Yes and no. The government still has to pay interest on its debt, which is paid with tax receipts. The government shouldnt be in the business of making money, yes, but it also has to spend less than it makes. In this case, these loans would have had a negative real yield, meaning they made things worse debt wise. The consequence for higher debt, is devaluation of the dollar and these massive and frequent swings in economic conditions.

[signatoremo]

The government would have to spend a whole lot more should the banking system collapse.

[Geisterde]

You should read the creature from Jekyll island. Bailouts just make the problem bigger and more centralized. It cant fix anything, its not possible, that debt still exists on someones balance sheet, it still accrues interest.