The USFG should reinstate the Glass- Steagall Act.

Thanks for the arguments. Sorry if my responses seem abit short, I was abit busy yesterday, and only had time today to write a response.The Depression As this seems to be more of a run-down of the series of events surrounding the Great Depression, there's not much to argue here. We can agree that what my opponent describes as a 'domino effect' is what brought upon the stock market crash. The question here is whether or not affiliate banks – that is commercial banks engaging in speculative activity, were specifically to blame for underwriting lower-quality securities, which would expand the housing bubble. Voters should keep in mind that the burden of proof is on Pro to prove that this was the case. Glass-Steagall Act 1933 My opponent cites articles which certainly prove that there were lobbying efforts taking place to repeal Glass-Steagall, however this has little to do with this debate, because it doesn't contribute to a case for glass-steagall since most regulations, useful or not, would be countered by lobbying efforts by banks. To say that these lobbying efforts are grounds for the reinstatement of the legislation just for the sake of opposing the banks is absurd. My opponent also quickly skims over the fed's low interest rates, which could also be considered a main cause for the crisis. These 1% rates were the main drivers for margin purchasing, which is in the end what caused the destruction of the banks' balance sheets. 2008 My opponents main contention with bank deregulation appears to be the “lock and key relationship” between commercial and investment banking entities, from which triple A ratings were given to low-quality securities that in turn attracted investors who were under the assumption that these ratings were credible. However, little is done by my opponent to provide evidence of this, apart from an economist.com article which briefly talks about Moody's/Standard & Poor in a sentence. However, even with my opponent's explanation of all of this, it's clear that the fed's low interest rate was a more underlying problem during the crisis. This is because, as he explains, investors all became highly leveraged due to money that was essentially free, which eventually backfired when the housing bubble burst. As I mentioned in my arguments, there exists a “safeguard” against the failure of large financial institutions, which is the Capital Requirements. I acknowledge that my opponent has commented on this, and I will address those comments in the next round. However, Capital Requirements are, in many ways, a cushion against the bursting of asset bubbles like the ones in the stock market crash of 1929, or the housing bubble burst. They are designed to protect the balance sheet of said banks, so that their solvency is not in question during a crisis. A large enough capital requirement would, in theory, sufficiently cushion the effects of an asset bubble burst, to the point where a taxpayer-funded bailout is no longer needed, or is at least, kept to a minimum. This serves as a reasonable alternative to glass-steagall, as far as bank failures and bailouts are concerned. Reinstate Glass-Steagall My opponent makes many points here, most of which reiterate the idea that the merging of banks has led to greater fraudulent activity by the banks, and that the reinstatement of the GSA would prevent more economic downturns by restoring confidence in the banking system. However, these points are both insufficiently proven. Economic downturns and banking confidence can also be restored via proper capital regulations which allow banks to sustain themselves in these situations without taxpayer bailouts. I have also already explained why my opponent's point about lobbying efforts fails to make any real case for the GSA. This alone cannot prove that the GSA is useful, because it is hard to determine which regulations being lobbied against are actually helpful, and which are not, without assessing the actual effects of those regulations.