Oh yes, with out a doubt it can absolutely bring out the worst of the worst. The taboo to not inbreed has been around for a long time. It wasn't worth it to risk the possibility of some type of deformity. Now with genetic testing you have a good idea about what will get when parent reproduce. Genetic counseling is quite common now. Now let's say you had a super smart family. They took the egg of a super smart granddaughter and the sperm of a super smart grandfather who have no genetic shortcomings when paired. Still wrong?
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Oh good I'm glad we're on the same page here! If that was the case, then the part of me that thinks inbreeding is wrong would say no, it's just dandy. The part of me that is a bit revolted by the thought just because it's been beaten into me that it's disgusting (society again, haha) would remain unchanged... But you don't KNOW that that would create no genetic shortcomings.
There are genetic tests, but you just can't test for everything. There could be something in the bloodline that nobody knows about but it comes up with a six-legged foal, and because nobody knew to test for it, it wasn't tested for - and it's only in that bloodline, so were they outcrossed it wouldn't be a problem. You can choose what to test for, but there could be any number of issues that could crop up just because nobody thought it would be a possibility, but when you breed two close family BAM, there it is - two genes crossed very badly and there's no way to to tell if that's going to happen. I realize that this is a problem with ANY breeding, but linebreeding multiplies this by SO much that it's just not responsible in my eyes.
IF there was a way to say 100% that there would be NO genetic problems directly stemming from line/inbreeding two horses, I wouldn't really have an issue with it. As another user posted a bit back, there's healthier ways to bring back a breed than risking inbreeding.
I'm having a really hard time trying to explain what I'm trying to say. When we covered this in my Genetics class he showed us a video about line breeding and the unavoidable (and often unforseeable) problems it can cause - even just little things, like a weak heart or whatever that you don't even notice but will shorten the life span. I'll see if I can find it - it really was interesting and good food for thought.
EDIT: You can't test for problems that aren't already known to come from a certain line. That's a better way of explaining it. You can make sure known inbreeding problems don't occur, but you can't 'test' for issues that haven't come out yet - but could and will from a certain close family cross.