Friday, April 22, 2016

To Save The U.S. Economy,
Americans Must Fix Its Debt Addiction
Michael Hudson highlights how the U.S. economy has become increasingly financialized & the result has been a sluggish economy .. "We need to decide whether to stop the cycle and save the economy at large or to stay in thrall to our banks and bondholders. Without clearing our debt, the economy will continue to languish in debt deflation and polarization between creditors and debtors .. This financial dynamic always leads to a transfer of property from debtors to creditors, unless debts are forgiven or brought in line with the debtor’s ability to pay. In the financial crisis, banks persuaded governments to “solve” the debt problem by taking bad bank debt onto the public balance sheet and then bailing out the banks. But while a government bailout or International Monetary Fund loan may enable private creditors to jump ship, it shifts the burden onto the government — mainly to be borne by taxpayers. This requires governments to cut back spending, or to raise taxes to transfer income from taxpayers to bondholders. In the end, society must choose whether to save the economy at large, or to save bondholder and banking claims on the economy."
LINK HERE to the essay

No comments: