The downsizing of America is at hand.
By Patrick J. http://www.wvwnews.net/story.php?id=5633
How did the United States of America, the richest nation on earth, whose economy represents 30 percent of the Global Economy, arrive at the http://www.wvwnews.net/story.php?id=5683?
The answer lies in the abject failure of both America’s financial elite and the political elite of both parties — the same elites now working together to determine how much of our wealth will be needed to http://www.wvwnews.net/story.php?id=5682 the nation out of the crisis of their own creation.
Big Government is riding to the rescue — saddlebags full of our tax dollars — to save us from the consequences of the stupidity and folly of Big Government. New York and Washington, responsible for the crisis, are now being hailed by the media as the 7th Cavalry, coming to http://www.wvwnews.net/story.php?id=5635 a beleaguered nation.
Had there not been a steady and constant infusion of easy money and credit into the U.S. economy by the Fed, for years on end, a housing bubble of the magnitude of the one that has just exploded could never have been created.
Had the politicians of both parties not coerced and pressured banks, S&Ls, Fannie Mae and Freddie Mac to make all those sub-prime mortgages, then to tie this rotten paper to good paper, convert it into securities and sell to banks all over the world, there would have been no global financial crisis.Had they seen this coming and acted sooner, the Federal Reserve and Treasury would not today, like Henny Penny, be crying, “The sky is falling!” and the end times are at hand, unless we give them 5 percent of our gross domestic product to buy up suspect securities backed by sub-prime mortgages.
Consider what the “Paulson Plan” of Treasury Secretary Hank Paulson, against which Sen. Richard Shelby and the House Republicans rebelled, entails.
Since Americans save nothing and have to borrow from abroad to finance our trade and budget deficits, wars and foreign aid, what the secretary proposes is this: that Congress authorize the Treasury to spend $700 billion to buy up the toxic paper on the books not only of U.S. banks, but of foreign banks operating in the United States. According to The Washington Times, the Treasury would also be authorized to buy up securities backed by rotten auto loans, student loans and credit card debts.
Thus America would be borrowing from China, Japan and the Middle East to tidy up the balance sheets of the banks of China, Japan and the Middle East. And all the rotten paper will be offloaded onto U.S. taxpayers, who hopefully will be able to recoup some of their losses, because some of the paper will be good.
Why should we do this? Because otherwise there will be a financial panic, followed by a market collapse, wiping out pensions, 401Ks, portfolios and defined benefit plans of Middle America, forcing millions into bankruptcy and millions more to put off retirement and continue working until they drop.
In a democracy, it is said, you get the kind of government you deserve. But what did the American people do to deserve this? What did they do to deserve the quality of financial, corporate and political leadership that marched them into this mess — and that today postures as their rescuers?
http://buchanan.org/blog/2008/09/pjb-day-of-reckoning/