USA - Stimulus Package - Recovery Plan

Michael Hudson, Distinguished Research Professor at University of Missouri, Kansas City. A former Wall Street economist, he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire. His latest article, Obamas Awful Financial Recovery Plan, is online at counterpunch.org


Why do you think that Obamas financial recovery plan is awful?

MICHAEL HUDSON:
Because its not leading to recovery at all. Its now up to $12 trillion. Its a giveaway to the banks, to the creditors, without a single penny for actual debt reduction. And I had thought that at least half a percentage point, $50 billion, was going to be to write down troubled mortgage debtors, but it turns out that not a penny of mortgage debt is going to be written down. When the banks have lent more money than a mortgage owes, with 38 percent, the government is going to create its own debt to come in and make up the difference, so the debt is going to continue to grow exponentially, and its way beyond the ability of the economy to pay. If people have to pay the amount of debt that they have now, there wont be any money to buy goods and services, companies will not sell as much, theyll invest less, theyll hire less, and theyll continue to downsize.

And whats happened is that this is the greatest transfer of wealth really in American history. Its doubled the American debt. The closest parallel I can think of is William the Conquerors conquest of England. He came with a military band, conquered the land and imposed taxes over the whole land, basing it all on the Domesday Book, what—the rent could be squeezed out. In this case, the rip-off has been non-military. The bankers have done insider dealing to get the government to give them or guarantee them $12 trillion of bad loans theyve made, many of them fraudulent.

And then theyre trying to blame the poor for all this, as if the poor are somehow exploiting the rich by taking out more loans than they can pay. Yesterday, Senator McCain said—he warned that all of this debt was going to be paid by the future generation, and were exploiting them. But thats not how to think of it at all. When you have a debt that goes to a future generation, you have taxpayers paying to bondholders, just like in the nineteenth century you had the western states paying to the eastern states. So what youve done is given $12 trillion to the richest one percent—or ten percent of the population, and youve indebted the economy and the government to them for the next hundred years. Youve created a new class of ruling families.

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[starlight1946]

Obama is protecting the rich not the poor.

[moofph]

...so who are the real terrorists?

the ones that do not defend our constitution but have taken an oath to do so.

the ones that attack our economy and extort money from our wages and earnings.

the ones that provide deceitful information or hide facts to mislead the public.

the ones that form and protect secret societies that use subversive tactics to attack the U.S. by infiltrating government and creating policy to serve themselves rather than serving the people.

[choobie12]

I suppose to reverse the reccession a good combination of approaches would be to offer a job programs similar to canada where workers are laid off and then brought back to work then laid off again in burts to try to get the economy moving at some speed such that it can be scaled up non-discretely. Also then an infrastrcuture bank that operates similar to a government institution that takes advantage of money multiplication of 10x or so, which is only a little politicized at the start.

[Trader5822]

Less than 1200 views ... people don't want to hear the facts, lets pay attention to Michelle Obama's arms and what kind of dog they get .

[Oneplanet1]

You are the only smart American that is talking sense. Well done.

the pinnacleMan

[Oneplanet1]

continued page 3

from Obama must quickly switch to making money for the Federal Reserve and concentrate on reversing the economuc reccession before America loses it ability to act.

The basic guide here is make sure that every dollar paid out, 2 dollars come in directly.

With 787 billion dollars, only an idiot can fail to rescue the US economy.

the PinnacleMan

the OnePlanet Guy

[greenitup]

Thanks, Michael. Now, what do we do about it? N. Dakota is only state with own bank and I hear is fat and happy. Can we set up credit unions, banks owned by the people-no shareholders? Give us solutions or tell where we can find them. The Wall Street and government crooks are too big to fight. Later for that. Right now we need to outsmart them. With independent finance structure,we can downgrade their ability to extract, starve them to death. Lay out solutions, please. Keep up the good work.