Enough of Everything but Dollars
The Money Party at Work
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.
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."