An economics debate of very great importance is surfacing. Is the government’s economic rationale for bailing out the banks valid? If it is not, then the entire case for the bank bailouts fails. On one side of the debate are Austrians using Austrian economics, on the other side are Keynesians using Keynesian economics. Gary North writes "The government, which is running a trillion-dollar deficit this fiscal year, is adding ever more debt to save the favored banks. It is buying the banks’ insolvency in the name of future taxpayers." North sees the bank problem as insolvency. Concerning FED and government … Continue reading Insolvency vs. Liquidity