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.”

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.

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.

Michael Collins writes for Scoop Independent News and a variety of other web publications on election fraud and other corruptions of the new millennium. He is one of few to report on the ongoing struggles of Susan Lindauer, an activist accused of being a foreign agent, who was the subject of a government request for forced psychiatric medication. This article may be reproduced in whole or in part with attribution of authorship, a link to this article, and acknowledgment of images. Read other articles by Michael, or visit Michael's website.

5 comments on this article so far ...

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  1. Tree said on March 2nd, 2009 at 10:48am #

    Good article although just once I’d like to read of a possible scenario if the banks were not given these huge chunks of cash. It seems we hear of “dire consequences” but I’ve not heard what exactly they are.

  2. Doug Page said on March 2nd, 2009 at 12:46pm #

    Many of us are trying to offer an alternative: the proposed American Monetary Act that would prohibit money creation by the banks, authorize our government to be the sole creator of money, and halt the idiotic borrowing so that we can pay interest to the borrowers.
    The act would authorize our government to issue as much money as could be used for infrastructure rebuilding and other non-inflationary needs. Google it if you are not familiar with it.

  3. SJ said on March 2nd, 2009 at 12:47pm #

    I herd B.O. loud and clear in his campaign it is mind boggling , the sheepishness of the lemmings? After all the suppression and cover up in 9/11. The lies to justify Iraq, who is to say we are being told any of the truth. If nothing else, nothing will even begin to happen until they have manipulated enough of the military available public into civil service to escalate their military objectives. This also serves to give an illusion that the US public is behind the B.O. that is coming out of Washington. The EU leaders are hoping for this so they can do the same after their elections this yr. Baby boomers are complicit in hopes to save their retirements, and for this they are taking the chance of massive betrayal of their children and the younger generation of the capitalist countries. Had the banks been allowed to fail, we’d be in a similar boat, but wall street would have collapsed and everyones 401K. Larger chance of civil unrest at such an accellerated rate of collapse. This way they hold everyone at bay and suck what ever amount potential out to obtain their world military and market dominance. They are walking a tight rope and they know it, but then it is not had to imagine what would have become of their world had they not gone for the gold, (oil). The ability to take control of all that cheap labor in China, India, and Indonesia. Once they achieve driving the blue collar workers down at home they will have it. But they need our work force for military enlistment to accomplish this.

  4. greybeard616 said on March 2nd, 2009 at 6:52pm #

    The hope is that the people will rise up, as did the Argentinians, Icelanders and Latvians and demand not an overhaul, but a replacement of the current regime–abolish the Fed, nationalize the lending institutions, and start to re-invigorate the manufacturing sector. Of course, that is a form of –shhh–socialism! But we already have socialism, for the elite, the privitization of profits and socialization of debt!!

  5. Michael Collins said on March 4th, 2009 at 11:53pm #

    Tree, I too would like to know what the deal is if the banks go under. I do know what will happen if they survive. The same thing that just happened. It’s their nature.

    Doug Page, I like this:

    (1) Disbursement of United States Money under this Act shall be made in lieu of borrowing through Treasury instruments.

    Thanks for the information. I’ll take a good look at that. This is the type of material that needs to be part of a citizens debate. We could randomly pick a unicameral decision making body on fundamental changes from the entire population and come up with 435 (House) + 100 (Senate) individuals who would make positive decisions about the course of the country, should they be availed of relevant information in a fair fashion and isolated from any money or other typical influences.

    SJ That’s a grim vision but it’s hard to come up with alternatives. The decades long “right to work” (at low wages) movement has been an unqualified success. Those who supported it because they were in management are seeing the next phase, “the right to lose your pension” movement. The EU as a force for anything positive is pure fiction. The proposal to enlist the Republic of Georgia as an member of NATO is absurd. The lack of stern criticism of Georgia’s absurdist attack on Russian troops is another indicator that the EU is no different than the Bush White House. I think that their plan is faltering and their time may be up.

    greybeard616, I can’t see people tolerating this wealth transfer much longer. They’ve taken just too much, too quickly because their scheme collapsed. Add the Irish people to that list, and they were doing as well as anyone in Europe. Lots of work to do.