I don't disagree with most of what you say, but one crucial point you miss in my view is that letting public trust in banks & "the economy" collapse is really "expensive" (in hard productivity, not just on paper).
This is what was allowed during the great depression and what we desperately tried to avoid in later crises.
Western democracies are not set up at all to let the government direct and compensate millions of workers on the turn of a dime; micromanagement by government in such a situation can be expected to be extremely wasteful and ineffective, and this only got worse, because we have less generic/unqualified use for human labor than in the past (construction, railroads, motorways, heavy industry), and specialists are even harder to manage.
If everyone stops even just believing in the ability of local supermarkets to provide toilet paper next week or, on the other end of the spectrum, starts distrusting the banking system/dollar entirely, then the consequences can be extensive, expensive and slow to recover.
It might even be worth it to feed taxpayer money to rich greedy capitalists because the public comes out on top still by avoiding that trust collapse.
This is what was allowed during the great depression and what we desperately tried to avoid in later crises.
Western democracies are not set up at all to let the government direct and compensate millions of workers on the turn of a dime; micromanagement by government in such a situation can be expected to be extremely wasteful and ineffective, and this only got worse, because we have less generic/unqualified use for human labor than in the past (construction, railroads, motorways, heavy industry), and specialists are even harder to manage.
If everyone stops even just believing in the ability of local supermarkets to provide toilet paper next week or, on the other end of the spectrum, starts distrusting the banking system/dollar entirely, then the consequences can be extensive, expensive and slow to recover.
It might even be worth it to feed taxpayer money to rich greedy capitalists because the public comes out on top still by avoiding that trust collapse.