[quote=@Vilageidiotx]Okay, I agree with the essence of this. I would love to see corporate welfare go away. I don't know if I've ever met a person who supported the entire 'too big to fail' concept anyway. That being said, I am no convinced that this will stabilize conditions on the ground. If the end result of a [u]total[/u] government/wealth divide (if such a thing is even feasible) is the violently cyclical economic system we used to see in the 19th and early 20th century... I don't want to spend any of my life living in a Hooverville. I'd take a recession that means some time on unemployment over a depression that means some time on the streets any day. 
[/quote]

Recessions are a natural part of the business cycle that have the benefit of 'cutting waste', i.e. removing inefficiency. Their severity, how much they impact the average Joe, is determined by exactly how much waste there is to be cut. If only a few enterprises have become inefficient, only a few enterprises will be cut. If the state has intervened (through bailouts) to allow entire industries that have become inefficient to artificially stay afloat, the recession hits harder, because more enterprises are inefficient. This means that subsequent bailouts become more and more costly over time, because the enterprises they're sustaining are becoming less and less efficient. Additionally, this kind of behaviour has the effect of encouraging more enterprises to become inefficient (or rather, discouraging the opposite). Why minimize risk when the government will just step in and save your ass if anything bad happens? It's a feedback loop, one which makes inequality worse and worse over time, makes recessions hit harder and harder every time, and makes the economy increasingly inefficient.

The government doesn't necessarily need to entirely remove itself from the economy, although personally I would love that idea. Just ceasing the legalization of fraud in the finance sector and the bailing out of businesses that really [i]should[/i] fail will make everything so much better off in the long run.