Do you have any idea what the current financial situation would have looked like if the government had just let the banks collapse?

Hint: a lot like a jenga tower does just after you take away a vital piece.

Letting the entire financial system collapse might _possibly_ have led to better behaving banks in the long term(although I doubt it, people don't learn). But in the short term it would have cascaded through the entire economy and left the economy entirely non-functional.