Let’s see what the rest of the world thinks; this taken from:
The bailout is simply a scheme to transfer money from the many to the few. From the middle class to the rich. If you analyze the details you see that the Treasury, using public funds, will overpay for the depreciated assets of the financial institutions that will consequently make out like bandits instead of having their stockholders wiped out as should be the case. What else what you expect from a Republican administraion peopled with figures from Wall Street? Transferring money from the masses to the rich in all sorts of ways has been what the GOP has been about for as long as one can remember. They are simply continuing to do so.
This lesson from America is still not learned in London."
Nor has it been learned in America, and sadly, it will never be “learned”, because the fact is, this is not a crisis for the rich and decision-makers, it’s only a crisis for the poor and powerless.
For the “leaders”, this is what they call “a business model”.
Here’s how the model works:
1)convince people that efficient markets take care of all needs, and that dreams can come true;
commit blatant highway robbery, accompanied by reassuring words about “trickle down” and GDP growth;
suck the system dry until the point of collapse;
suck yet more money from the taxpayers in the name of emergency rescue; 5) begin a new bubble economy in a different and equally absurd product/commodity/service;
repeat the cycle.
Or this from bernie Sanders:
My favorite? This:
And where is the money coming from Will? Is the US ‘to big to fail?’ Who bails-out America?’
The point has already been made that the US with its hollowed-out industrialised base and its largely financialised Wall Street dominated economy is already in hock with the rest of the world. East Asian and middle-eastern investors are sitting on top of a mountain of bubble-dollars and dollar-denominated assets. And yet the US proposes raising more money on world markets (one supposes by selling more Treasury bills) What effect will this have on the value of the dollar, and can the dollar remain the world’s reserve currency with this sort of volume of bubble-dollars in circulation.
In addition, US government deficits, both state and federal, are assuming unredeemable levels (counting social security and medicare). For example.
‘‘In 2003 the American Enterprise Institute projected a $45 trillion shortfall; $47 trill countered the IMF in 2004; the National Center for Policy Analysis and the Brookings Institution came up with $50 trill and $60 trill respectively in their own research reports published in 2003 … but the biggest of the projections came in 2004 from the Social Security and Medicare Trustees themselves. They estimated the unfunded benefit liabilities to have a current value of $74 tillion.’’ (Empire of Debt - Bonner and Wiggin - 2006)
And of course we have left out the huge deficit on current account.
The US endless foreign wars and its uncompetitive economy is in irreverisible decline. The figures speak for themselves. For the two decades it has been kept going on a life support machine principally since the dollar has been the world’s reserve currency and East Asian banks have been recycling bubble-dollars by the purchase of US dollar-denominated assets (in the main, Treasury bills). This can go on as long as the holders of these assets are willing to take more of them. But there must be a limit. Any further US borrowing on world money markets will surely test this limit.
In short the consequences of the massive bailout of which you speak so approvingly only buys time for the US (which by now must be approaching technical bankruptcy) and the cost could be a massive fiscal crisis for the US some way down the road.
Moreover, tax increases and public expenditure cuts will adversely affect the US economy since they represent a withdrawal from the circular flow of income. This will inevitably mean rising unemployment and more fiscal problems since tax revenues will fall and public expenditure will need to rise because of uenployment.
So you see Will that the ‘solution’ to the financial crisis, even if it works, will only sow the seeds for future crises. No way out I am afraid.
Scary stuiff here,