The government fears financial crises because they make life difficult for the incumbent officeholder and dramatically reduce their re-election prospects, so their incentive is to solve crises immediately by throwing cash at them rather than addressing long-run structural problems.

causalpending

Speaker

Donald Baur

Evidence Quote

Governments fear crises because they reduce re-election prospects, so they solve problems now through cash bailouts, creating worse long-run consequences.

Source

Why You're Getting Poorer: Major Slowdown Ahead | Donald BoudreauxDavid Lin
Created: 8/11/2026, 6:30:09 AM

My Notes

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