| The fundamental problem underlying the current financial situation is that our economy is built on federal borrowing and consumer debt. The proposed solution is to borrow $700 billion and ram it into the banking system so that Americans can borrow it from the banks. What's wrong with this picture? |
| The biggest problem with the recent "Wall Street bailout" is that in the end, it won't work.
The fundamental problem with the economy is that it is based on debt. It is hollow. And it is finally caving in on itself. That was inevitable considering that the Bush administration and its enablers in Congress have been borrowing a billion dollars a day (give or take) for eight years, with no plan to reduce the borrowing, never mind pay the money back. So of course their solution is to borrow $700 billion to cram into the banking system so that we can borrow it. More borrowing. And to make the plan palatable to House Republicans, they threw in a few more tax cuts and eliminated off-sets to pay for them. The result…even more borrowing. Isn't it obvious that this isn't going to work??? Someday, somebody somewhere is going to have to pay for something. “The next round of capital that comes in from abroad is going to be much more demanding and move into real assets,” argued Jeffrey Garten, professor of trade and finance at the Yale School of Management. “Being a bigger debtor nation means losing even more of our sovereignty. It means conducting our economic policies with an eye toward whether others approve. It means bearing the advice and criticism that we have dispensed ad nauseam to other countries for over half a century. It means far more intensive consultations with other capitals on our fiscal policies and our monetary policies.” Source: "Swedish Spoken Here" By THOMAS L. FRIEDMAN - NY Times - October 4, 2008 |
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