The act of a bailout couples the credit of the rescuing organization with that of the rescued. That's literally what a bailout is: the rescuer agrees to take on some of the losses and credit risk, usually in return for agreements for future payments and power over how the business is restructured and managed. In the process, the credit and assets of the rescuing organization are damaged, and the bailed out organization is saved. Purely financial transactions never affect the actual reality on the ground, only how risks, responsibilities, and rewards are apportioned.

When the organization is as big as the U.S. government and has as good credit as the U.S. did in 2008, you can save an awful lot of financial institutions. But if it gets to the point where everybody expects to be bailed out and people start acting accordingly, you can't. Eventually the government ends up falling, as people start realizing that the economy isn't actually working and everybody is just cooking the books with financial transactions.

Government policy makers know this, and their livelihood is dependent upon the continued existence of the government, and so at some point they declare "Nope, bailout is not going to happen this time. You're on your own." At that point, the last group of people who took stupid financial risks are left holding the bag. It's very much like a pyramid scheme: the going is good as long as you can find a greater fool to assume the risk from you, but at some point there are no greater fools, and you find out the greater fool was you.

We've never had an executive whose financial policy positions include eliminating FDIC and that much of the federal deficit is fraudulent so can safely be disregarded and left unpaid. Believing in continuity at this time is a poor bet.

Governments and nations collapse. Anyone who was bullish in 235 CE Rome would have died long before their investments would be back in the black.

> Broad market indices, however, don’t fail.

Famous last words