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Economics 101 - Canadian Economist on the Banker Bailouts

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Nikki Stone1 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-19-09 04:02 PM
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Economics 101 - Canadian Economist on the Banker Bailouts
 
Run time: 07:52
https://www.youtube.com/watch?v=Yx76RmNpAVM
 
Posted on YouTube: September 14, 2009
By YouTube Member:
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Posted on DU: September 19, 2009
By DU Member: Nikki Stone1
Views on DU: 1629
 
"We are dealing with a pernicious circular relationship. When the banks pressured the Treasury to assist them in the form of a major bank rescue operation, it was understood from the outset that the banks would in turn assist the Treasury in financing the handouts of which they are the recipients.

To finance the bank bailout, the Treasury needs to run a massive budget deficit, which in turn requires a staggering increase of the US public debt.

Public opinion has been misled. The US government is in a sense financing its own indebtedness: the money granted to the banks is in part financed by borrowing from the banks.

The banks lend money to the government and with the money they lend to the government, the Treasury finances the bailout. In turn, the banks impose conditionalities on the management of the US public debt. They dictate how the money should be spent. They impose "fiscal responsibility"; they dictate massive cuts in social expenditures which result in the collapse and/or privatization of public services. They impose the privatization of urban infrastructure, roads, sewer and water systems, public recreational areas, everything is up for privatization.

The recipient banks are the beneficiaries as well as the creditors. As creditors, they will oblige the government a) to slash expenditures b) to run up the public debt through the issuing of treasury bills and government bonds. "
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notesdev Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Sep-19-09 10:06 PM
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1. Big kick
This is why we can't pay for healthcare or anything else.

To anticipate the retorts, yes war spending has had a big impact, but it is dwarfed by the immense sums these bastards have stolen from the system.
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