This is the Bush cliques attempt to manufacture an October Surprise from the mortgage meltdown--a virtual coup d'etat.
From Joe Bageant's Blog
Take comfort, the country is run by idiots.
Meanwhile, I had the repugnant experience of talking to two economists a couple of days ago, one an international financier, and the other a wealthy developer with a master's degree in economics (who appears in my book.).
I posed this question to both:
What if we took the bail-out money and paid off every college loan, every credit card, every pending foreclosure and every mortgage in arrears, and every unpaid hospital bill? Wouldn't that free up a lot of income to stimulate our economy, 70% of which is based on Americans consuming good, services and commodities? Wouldn't it be better to have the money circulating, stimulating the U.S. economy than stashed in overseas as accounts? If Bush's little $250 rebate propped up the national economy for a couple of months, wouldn't distributing the $700 billion push the economy into the stratosphere? What if we used it to pay down the national debt? Wouldn't the American dollar reverse its plunge? At the very least for the first time in 80 years Americans would actually owe the debt to themselves, not the unseen financial lords.
The international financier said: "It just cannot be done. The financial machinery of our free market economy would fall apart. Then we'd be in worse shape than ever."
"How's that? It seems like it's already fallen apart. Been turned into a swindler's paradise, with the swindlers now asking that all future productivity of Americans be signed over to them, since there's nothing left to steal at the moment."
"It simply cannot be done. Nor should such socialism ever be allowed. It's a ridiculous idea."
The economist developer, when asked the same question, "Why not bail out the American people, instead of the fat cats?" was more honest:
"Doing that would have unintentional consequences.'
"Like what? You're an economist, so tell me."
"Well, I don't know. That's why they are called unintentional."
"So why should the American public be perpetually and increasingly in debt?"
"Because debt is the source of American wealth."
"Wealth for whom?"
"Obviously for those who understand the system and have the know how to use it to its best purpose for all concerned."
"Won't that devalue the dollar over time?"
"Sure, but if you've got enough dollars it doesn't matter. Look at how African dictators live, despite that their nations' currency is worthless."