Will the history repeat itself for US Govt???

WILL HISTORY REPEAT ITSELF?

In the past too, the world’s largest economy has suffered periodic financial crisis. In the 19^th century, bank panics occurred on regular basis, of course, followed by Great Depression of 1929 when two-fifths of American banks went bankrupt. Similarly, is the US economy in the midst of another such crisis?

The Obama administration’s answer is: financial reforms and promises to prevent such crises once and for all. Experts say that every financial crises originates from a failure of imagination and before the crisis, no one forsees problems. According to them current crisis did not occur merely because of subprime mortgages or even complex bonds. In early 2007, when the problems of subprime crisis emerged, a few regulators and policy makers foresaw a wider financial meltdown but most of them failed to detect looming chain reactions. Therefore, the experts say the problem was not the lack of regulation, but was lack of imagination.

It indicates that regulation is not a panacea for future crises.

Source: the Icfai University Press.