And we have already spent the equivalent of “about $7.8 trillion in direct and indirect financial obligations. That is equal to about half the size of the nation’s entire economy… “
Well, for that price tag, why not just buy up all the troubled mortgages? In fact, at this rate, why not nationalize the entire banking system.
We are facing a Depression. And as Pete Morici tried to say on Lou Dobbs, we are not attacking part of the problem: All those jobs we lost to China because of mismatched currency. Put an adjustment (tariff) on all imported Chinese goods that would adjust for the currency mismatch.
Lou and the rest of the panel were too numbed by the amount of money being thrown at the credit problem to hear Morici. (Probably too late to do that anyway.
China will face its own problems as it loses its Sugar Daddy. “Immiserizing growth,” I think it is called: The fate of a country that depends on exports for growth.)
So here we are, on the cusp of another Depression. We can pour money into the banks, but we cannot risk a dime for our auto industry, or its 3 million employees.
There is no plan here; no thought. Just crank up the printing presses: The answer to deflation. And after this game is over and the banks are loaded to the gills with cash, we will be staring at a mountain of debt. Everyone on Lou’s panel agreed that the end game was hyperinflation, as all that money came pouring back into the system. Who knows?
I still think nationalizing the banking system is a clean solution. No more fancy derivatives or CDO’s. Let’s have an old-fashion banking system. Sideline the money boys. Send them off to China or Sudan. Let them watch ice melt in the Arctic. Count polar bears. Have them do something useful.
Who knows how this will all play out?
If we do enter a Depression, no one, certainly not I, knows what will happen then.
A line from Yeats comes to mind: “All things fall and are built again,/And those that build them again are gay.”