What does too big to fail mean?
This could be explained at length, but the endgame is that it would do so much harm to the economy that people simply wouldn’t know what to do. Unemployment could skyrocket and the problems we face could only get worse.
This is especially the case in the United States where we have no significan social safety net. Public housing, the emergency room, and even our relatively limited bankruptcy laws don’t cut it. If everyone could rely on some kind of soft landing, we could let the “free market” do its worst.
The irony here is that market capitalism works best when there’s a safety net to ensure that risk taking doesn’t result in homelessness or other forms of utter poverty.
I also submit that this lack of a safety net stifles innovation. Wanna start that new company? Oh yeah, what are you going to do about health care? Got kids?