Forget about debating the possibility of nationalizing banks. It has already happened, says NYU economist Nouriel Roubini.
"The government has already taken over the financial system," Roubini told Business Insider, commenting that U.S. policymakers have committed $9 trillion to rescue the financial system and already spent $2 trillion.
"So let's stop the delusion about 'no nationalization.’"
The real issue, Roubini says, is whether nationalization should remain partial and piecemeal as it is now or become complete, at least for a while.
He opts for complete, saying that the current partial nationalization is actually the worst situation of all.
“Being half pregnant instead of fully pregnant is not possible,” Roubini says.
“You have to take over the (toxic asset) problem and solve it so there can be a restoration of credit.”
Roubini believes full nationalization is inevitable, and much better for the market and the economy because it's the first step in the process of cleaning up "bad" banks so they can later be re-privatized and sold to private investors, as IndyMac was last year.
"Nationalization is a loaded term for a lot of people,” Douglas Elliott, a fellow at the Brookings Institution, told the San Francisco Chronicle.
“It's seen as the kind of thing that European or more socialist governments do."
Banks, Elliott notes, are central to our whole economy because they move money from savers to businesses and homeowners.
“If we let the existing banking system fall apart, it will cause immense destruction," Elliott says.
© 2017 Newsmax. All rights reserved.