The crisis in the United States is reaching a silent boiling point in the struggle between the citizenry and the largest banks. Revealed today in a story breaking across various news agencies, the United States has potentially indebted itself by nearly $24 trillion dollars through various bail out programs since 2007. This is effectively bankrupting our entire country and if allowed to continue will ruin any chance of a sustainable recovery. We are already on the heels of a major change in how we live, work and save money.
If this amount of debt is incurred on a federal level it is twice our GDP. That is completely out of bounds with any kind of spending plan that is sensible. It puts the creditors of our nation in to a very difficult position, because they understand we’re debasing the world’s reserve currency to buy our way out of a financial catastrophe instead of facing the pain and making constructive changes. These $24T in financial commitments could literally strangle our nation’s economy for decades.
Some things never change
Wall Street is back to its old tricks. Goldman is making “record profits” amid a crisis where its competition conveniently perished under the watch of former CEO Hank Paulson as Treasury Secretary. Now Morgan Stanley is repackaging subprime mortgage debt as AAA while JP Morgan, Barclays and others are leasing supertankers full of crude oil. All of these actions are benefiting the banks at the expense of tax payer dollars that provided the cushion so that these companies could continue to sustain their existence.
Time to wake up
Most of the time people turn off the TV, put down the newspaper or close their browser when they encounter the intentionally dull financial news. They want to focus on the here and now, not projections of profit or bailout recapitalization. It’s understandable that in a functional society people would have the luxury of ignoring the banking system because they have some implicit trust, a notion of safety, about where their money sleeps. This relationship should no longer be taken for granted and the institutions holding the dollars we cherish as our future savings may be participating in the largest, most sophisticated power and money grab the world has ever seen.