And what about the Fed's Even Larger Giveaway?
by Michael Hudson
Global Research, October 13, 2008
by Michael Hudson
Global Research, October 13, 2008
(Cartoon by Carlos Latuff)
".....Will voters see the asymmetry in Congress's failure to offer debt relief for homeowners as real estate prices plunge below the mortgages that are owed? Will its members be blamed for not rewriting the nation's bankruptcy laws to free families from debt peonage - and free housing markets from the price declines that result from today's proliferation of foreclosure sales? For that matter, will there be no relief for corporations having to cut back investment in order to service their junk bonds and other debts with which Wall Street's corporate raiders and "shareholder activists" have loaded then down?
Evidently not. Instead of requiring creditors to absorb losses on the excess of debts over what can be paid, the debts are being kept in place, not scaled back to what the economy can pay. The government is to make creditors and computerized derivatives speculators whole - and will act as collecting agent for the overhead of bad debts the economy has run up.
Today we can see the debt-fueled bubble of asset-price inflation that Alan Greenspan trumpeted as real wealth creation for what it really is - credit creation to bid up real estate, stock market and packaged-debt prices. Tangible capital formation has been left out of account, as if postindustrial economies no longer need it."
".....Will voters see the asymmetry in Congress's failure to offer debt relief for homeowners as real estate prices plunge below the mortgages that are owed? Will its members be blamed for not rewriting the nation's bankruptcy laws to free families from debt peonage - and free housing markets from the price declines that result from today's proliferation of foreclosure sales? For that matter, will there be no relief for corporations having to cut back investment in order to service their junk bonds and other debts with which Wall Street's corporate raiders and "shareholder activists" have loaded then down?
Evidently not. Instead of requiring creditors to absorb losses on the excess of debts over what can be paid, the debts are being kept in place, not scaled back to what the economy can pay. The government is to make creditors and computerized derivatives speculators whole - and will act as collecting agent for the overhead of bad debts the economy has run up.
Today we can see the debt-fueled bubble of asset-price inflation that Alan Greenspan trumpeted as real wealth creation for what it really is - credit creation to bid up real estate, stock market and packaged-debt prices. Tangible capital formation has been left out of account, as if postindustrial economies no longer need it."
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