Michael Hudson
Michael Hudson
people investment enough
People have to pay so much money to the banks that they don't have enough money to buy the goods and services they produce. So there's not much new investment, there's not new employment (except minimum-wage "service" jobs), markets are shrinking, and people are defaulting. So many companies can't pay their banks.
people long illusion
Debts grow and grow. And the more they grow, the more they shrink the economy. When you shrink the economy, you shrink the ability to pay the debts, so it's all an illusion that the system can be saved. The question is, how long are people going to be willing to live in this illusion?
In fact, there's no way that banks can be paid everything that they're owed.
recovery people
There really isn't a recovery, and no signs of it on the horizon, because people have to pay the banks. It's a vicious circle - or rather, a downward spiral.
believe writing long
We're at the end of long cycle that began in 1945, loading the economy with debt. We're not going to be able to get out of it until you write down the debts. But that's what the IMF believes is unthinkable. It can't say that, because it's supposed to represent the interest of the banks.
losing economy
Either you can save the economy, or you can save the One Percent from losing a single penny.
mean really-mean
When you say "paying the banks," what they really mean is paying the bank bondholders. They are basically the One Percent.
greece
To save the banks, you would have to turn the entire Eurozone into Greece.
running mean loss
To save the banks from making losses that would wipe out their net worth, you'll have to get rid of Social Security. It means that you'll essentially have to abolish government and turn it over to the banking system to run, with an idea that the role of governments is to extract income from the economy to pay to the bondholders and the banks.
mean cutting people
The only way people can repay the debt is by cutting their living standards very drastically. It means agreeing to shift their pension plans from defined benefit plans - when you know what you're going to get - into just "defined contribution plans," where you put money in, like into a roach motel, and you don't know what's coming out.
trying business-plan
The banks' product is debt. They try to tell customers that "debts are good for you," but the customers can't afford any more debt, so there's no way the banks can continue their current business plan.
mean income deflation
When they say inflation is bad, deflation is good, what they mean is, more money for us 1% is good; we're all for asset price inflation, we're all for housing prices going up, and we're all for our stock and bonds prices going up. We're just against you workers getting more income.
thinking clothes car
People tend to think that paying a debt is like going out and buying a car, buying more food or buying more clothes. But it really isn't. When you pay a debt to the bank, the banks use this money to lend out to somebody else or to yourself. The interest charges to carry this debt go up and up as debt grows.
running people house
Today, people are having to spend so much of their money, to acquire a house and to get an education that they don't have enough to spend on goods and services, except by running into yet more debt on their credit cards and other borrowings.