Enough of Everything but Dollars

[seemslikeadream]

http://www.dissidentvoice.org/2009/03/enough-of-everything-but-dollars/


The Money Party at Work

by Michael Collins / March 2nd, 2009

The government bailout of failed financial institutions locks you into years of debt payments in behalf of the large private banks, debts that you did not create.

By all appearances, it also locks the country into years of a weak economy. That means unemployment, underemployment, and more suffering for those willing to work, but left out of the job market. It means lowered opportunities for those who do work and troubles for dependants and indigents. Vital national priorities including affordable health care and the massive effort required to save everyone form calamitous environmental catastrophes are now on hold or under funded.

We don’t have enough dollars. It was the banks versus the people and we just lost.

The theory is that without these payments, the banks will fail and we’ll all be in a world of trouble without them.

All of this depends on the questionable assumption that by saving the banks, we’re saving our economy.

To date, the government has given banks a total of $4.4 trillion dollars. That’s half of the accumulated debt for the federal government.

Citizens get the following from the recently passed $787 stimulus package: a voluntary program that allows banks to lower mortgage payments to help those with troubled loans; an extension of unemployment insurance beyond that provided by states; some innovative environmental programs; and, a much needed start on infrastructure repair. For those working and meeting their obligations, there little but a promise of rescue from calamity.

Here’s how the federal government and Federal Reserve Board have spent your money and obligated your debt.

[bleever]

1. Very interesting.

K&R.

[autorank]

2. You are a dream! k*r

:hi:

[stellanoir]

3. You are a complete and total flirt :)

Is that bratty enough for you. . .?

Such a financial scenario is truly beyond belief.

http://www.youtube.com/watch?v=Of91-6amCNI

K & R

[formercia]

4. The Federal Government continues a debit/Inflation based economy

Two years from now, a Trillion might buy a loaf of bread and the National Debt can be paid off with pocket change.

So, where's the worry?

snark.

[KharmaTrain]

5. What's The Alternative?

Many times over the years, I've predicted this house of cards known as the "markets" would come crashing down...but now that it's happening, while I saw it happening, the last thing I will say is I know how it will turn out or how to stop this thing. Either way, what's ahead is not going to be good for this country no matter how it ends up. Letting banks crash puts millions of homes into default or recievership, wipes out savings from millions (not just the rich, but everyone) and means a complete rebuilding of financial structures that will take years.

Or, we throw money at trying to keep the ship above water...hoping to create a bottom to the market, stop the losses and then try to slowly rebuild on the ashes of what's existed. The gamble here is the government "eating" bad banks and other financial institutions will protect the little guy while trying to clean out all the debt.

While I'm agahst that money is being given to the same crooks who got us into this mess, and Geitner looks hesitant to step on his Wall Street buddies heads, we're stuck with companies that were allowed to get too big to fail and its not just the rich who would suffer if they collapse. And don't think that since you don't have the millions they do that it won't have an effect...the biggest losers in the great depression was the lower and middle class (as it is now).

The long-term hope is that the investment...the stimulus...or various stimulus programs...will begin the payback. Isolating back debt and putting it in a RTC or bad bank gets the credit flowing again and new jobs and companies will start to develop. More jobs mean tax revenues being generated that aren't happening now. And with a recovery, the bad assets then can start to regain some value and those can be sold off to retire some of the debts incurred. Its hoped that a bottom can be put on this thing by years' end and the corner is turned next year. Here's hoping we can survive that long.

[Greyhound]

6. One alternative is massive, direct intervention by the government (us, remember?)

As opposed to this massive, indirect giveaway that will fail all but the criminals that caused this. What we are facing now is the proposition of all but the very top of the socioeconomic pyramid to endure a dramatic decline in everything for the sole purpose of keeping those on top, on top.

Nationalization of, not banks, but the function that the banking system is supposed to carry out, would be the first step, and there is no reason for this to take more time than has already been spent trying to prop it up as the mechanical systems are already in place.

The markets will collapse, but that does not mean that trading will cease, merely that the current mechanisms by which trade is carried out would be worthless. Producers will still have the means to produce and the need for that product will still exist, all that changes is the method used for them to get together. Oil and other commodities that we are dependent on foreign sources for would be the biggest problem, but we retain a very strong bargaining position. Without US consumption the price of oil would drop 60% - 75%, a strong motivation for oil producers to work with us. Other resource producers would face similar prospects.

There are numerous alternative models available to us, but we are constrained by maintaining the status quo. We are constantly threatened with dire warnings, such as, "what if China stops buying our debt?", but the truth is that most of the producing nations of the world cannot maintain themselves without us. There is going to be pain, we can all agree on that, so the question becomes, who will bear it? So far the only option we've been told of is that it must be the overwhelming majority of us.

I say, screw that, let's look at other options.

[KharmaTrain]

7. I'm All For Nationalization

of not just the banks, but of the entire financial system...as you state. The toxic assets have to be isolated if there's any chance for credit to flow and the downward spiral can begin to slow. As long as there are foreclosure and bankruptcies, the market won't recover and the longer it takes for credit to flow, the more jobs are lost as well as more bankruptcies.

In many ways our largest corporates and stocks are worthless as the fluidity of the markets and the stangnation of the economy have really shattered what value really is. Until there's some "bottom"...some end in the collapse of real estate values and other bottom indicators, the pessimists have damn good reason to feel that way.

Personally I favor the Swedish model of isolating all bad assets and breaking apart and selling off the good assets to smaller, more competent banks. Also for a wholesale restorating of regulations to prevent markets from detaching from reality...real profits, not "projections" that fueled the bubbles.

Cheers...

[Greyhound]

8. To you as well, and I have a question for you.

Do you think that governments fear the central banks, at least those that, like ours, are privately held?