Enough of Everything but Dollars The Money Party at Work Michael Collins The government bailout of failed financial institutions locks you into years of debt payments in behalf of the large private …

[Michael Collins]

Enough of Everything but Dollars

The Money Party at Work

Michael Collins

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 over $4.5 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.

Graph: The banks received $3.2 trillion through the Federal Reserve, a $700 billion bailout in October, 2008 and 2009 budget item for another $750 billion bailout. An unspecified number of citizens will benefit from the recently passed $787 billion stimulus bill.

All the failed banks had to do was wag their tails in unison and dollars flowed their way.

There has been debate on how to describe the current economic state - recession or depression. Reluctant to admit that we're even in a recession, private banks, most U.S. economic gurus, and the federal government consistently uses the term recession.

If you're living this experience right now in an area hard hit, you'll be interested to know what the International Monetary Fund (IMF) had to say. On Apr. 9, 2008, the IMF warned of a danger that the U.S. recession could become a depression. Nine months later, this February, it noted that the "Advanced economies are already in a depression."

The program to avert a prolonged depression consists of massive infusions of money into the private banks. The recipient banks are, of course, the very same institutions and executives who brought us this economic catastrophe.

So right now, citizens are holding the bag for the money given to the banks, while the banks have no obligation to tell anyone where a majority of this money went or even to repay it.

The banks were expected to take our money via the federal government and create credit opportunities for citizens, credit that would boost the economy. Instead, they took the money and created much tighter credit. As a result, the dollars needed to save citizens from the suffering caused by a depression are not available for that purpose.

Even though citizens will see no benefit in the bank welfare program, they are allowed to anticipate years of economic hardship in order to pay for it. We are currently held hostage by false assumptions about the supposedly inevitable decline of the economy and the suffering that must follow. The most damaging assumption is that the public has to bail out private banks for losses due to massive negligence (at least) leading to their insolvency.

We have become indentured servants working to prop up a comatose financial system and the banks that crated this crisis in the first place.

Does it have to be this way?

The United States has the most productive workforce in the world, thirteen of the top twenty research universities anywhere, and plentiful natural resources. We can feed our selves reasonably well, provide health care for everyone if we choose, and address educational needs when they are recognized. In addition, we're located between two very friendly countries and populations. That constitutes real wealth.

The nation and people possess everything needed to address the current financial crisis except one seemingly vital element, dollars. We lack the dollars in both the private and public sector to support needed public initiatives and the requirements of business. Citizens also lack the dollars to spend on essentials and non essentials, a critical step in bring the economy back to some semblance of stability.

What are the banks doing with all those dollars they've received from us? First, they won't tell us because they don't have to for all but the most recent $750 billion gift. Second, they're in no hurry to make those dollars available for productive purposes. It raises a legitimate question. Do the banks even have this money anymore?

The suffering awaiting the ongoing economic collapse is guaranteed as long as we have faith in the necessity of preserving the current financial system and the assumption that underlies it: we need to pay the debt for what they spent and lost.

Why should we?

We have businesses, small and large, which meet important needs and provide services that are of value. We have citizens and organizations that want to acquire those goods and services. Paying the debt for financial institutions and investors who will do again what they've already done makes no sense.

A great national debate should begin on what replaces the system that failed so miserably and it needs to start with the masses of people who actually do the work that produce our nation's true wealth. .

END

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[Michael Collins]

Nice to be here -- at a certified "COTO" site!

[curt]

Nice to see ya here, Michael!

[waldopaper]

a guy in Poland told me: the USA needs two things: $5-a-gallon gas, and more than two political parties...

Hah? sezzeye... We got two political parties? I explained to the puzzled Pole... who was about my age... remember when the Soviets were here? You could still "vote," right? Did YOU have "two political parties?"

What... you mean USA is like Soviet Union?? Exactly, sezzeye. Only one "party:" MONEY party. Same as it ever was... all over the world. Except HERE you KNEW it was... how you say... "shit?" In USA... too stupid... too much TV. Everybody believes the TV. Eat cheap food. Drink cheap beer. Get fat. Get stupid. Watch TV.

hmmm... sez he. food get expensive... gas get expensive... beer get expensive... you have tanks in the street.

yep. Tanks a lot.

[John Bessa]

$5-a-gallon gas

And $1 / gal Diesel

Put the gas guzzlers on trains leaving the road for the professionals

[Michael Collins]

Curt, thanks. This is something I've been expecting - a free thinker site. Looks good too, that never hurts.

waldopaper, Interesting comparison between the Soviet ahd US systems. You might have explained that the Soviet system was really just a traditional organized crime model where the privileged were able to loot the treasury for their own ends and cover any mistakes they've made. The looting of the treasury was what did in the Soviets; and that included looting it for defense interests by starting and sustaining needless wars. We on the other hand now have .... well, looting of the treasury and maintaining needless wars. But it's different, isn't it?

As for the people knowing, here they do. It's just the exquisite control system that keeps things locked down from an information standpoint. Post election, the last one in Mexico, the winners (who lost in the official count) decided to set up a parallel government and economy. That's worth checking out. They did it with real deliberation and planning - local and regional meetings etc.

John Bessa, how about that, $1 diesel. Just get rid of that smell;)

[BO]

Seems we're at the point where King Kong is just about ready to break his chains.

Here's a presentation about how AIG is essentially, holding us all hostage....

AIG: is the risk systemic? Hint: yes, if AIG goes bust, we all go bust. Looks pretty frightening to me.

[curt]

Our Michael has a new installment to share with us. Here & here.

Bo, I read a few angry King Kong comments in German, yesterday & today. Shit's about three inches from the fan. Looks like our big demos in Frankfurt & Berlin just might reap large turnouts. People are mega fed up with the FED.

[pan]

There is a bit of a paradox here. Since fiat currency is created through debt and financed through interest, the idea that the taxpayers have to pay off the interest on the bailout to banks - who will (if they aren't giving out big bonuses) then use the money as partial reserve on loans worth much more than the principal in order to create more debt, more interest and more money. It seems to me that the worth of the bailout will easily be surpassed by the worth of the interest on the first set of loans created and the banks could pay it back.....

But that would be assuming that the whole bailout thing was really based in something resembling reality - Citibank is reporting profits after being on death's door and requiring huge infusions of cash. The Market rebounds (for the day). Is there really anything real here?

[BO]

"Is there really anything real here?" Nope. It's a bitch when you look down only to find out you've run outta cliff.