From the mid-1980s to 2007, the ratio of debt-to-GDP rocketed from 165% to over 350%; more than doubling in that same period. The build-up of personal debt follows the exact same trend-line as the aggregate profits of the financial sector; they're opposite sides of the same coin.
Speculative bubblemaking is Wall Street's method of shifting wealth from workers to the investor class. It never fails. It's the reason why 42 states are now facing budget shortfalls, unemployment has risen to 9.5%, and $45 trillion has vanished from global equity markets. Financialization has created a global crisis, crushed consumer demand, increased systemic instability, and put the economy into a nosedive.
Wall Street has conjured up myriad complex debt-instruments (derivatives and securitization) which have been used to enhance leverage by many trillions of dollars so that financial mandarins and hedge fund managers can skim lavish bonuses and salaries on the front end before their Ponzi scam implodes.
Delinquencies, defaults, bankruptcies and foreclosures are all up, while state budgets buckle and joblessness mushrooms. The Republicans are following the neoliberal handbook, trying to crash the economy so that public assets can be privatized and public services terminated. They're being helped in their campaign by bailout-weary citizens who don't understand that short-circuiting government spending during a deep recession can precipitate a bigger catastrophe.
Government spending can take up the slack in demand, but it can't fix the economy's underlying problems. Now the top 1 percent of wealth holders own more than twice as much as the bottom 80% of the population. If the underlying problems are not going to be fixed, than why are liberal economists so eager to use their talents to minimize the effects of the recession? They're just making it easier for Wall Street huckster's to start gaming the system again.
The economy is headed for a protracted slowdown with persistent high unemployment and growing social unrest. The future is deflation.
Excerpted from Mike Whitney @ Counterpunch
Meaning the "intention" was to further enrich the wealthy (campaign donor) class.
Clearly the problem is larger and than Obama. Equally clear is he is sticking with Paulson's Recovery Plan, which is dismantling America, one person at a time. Radiologists and CEOs are just as outsourcable as factories
