There’s no law of nature that says this is always required, no. But I’m afraid in the situation the Fed found itself in back in 2008, there really was no other option without a much, much more severe recession. Governments had been massively over spending and actively promoting reckless lending, even legally mandating it in some cases with required ratios of low grade mortgages, for years.

I personally know two people that cashed out tens of thousands of pounds here in the UK by remortgaging and spent it. Plenty of consumers were behaving ridiculously recklessly too. It was a crazy time, and businesses need banks. People need banks. Should your bank holding you accounts and mortgage have been allowed to fail? How about the bank financing your employer? How about both at the same time?