The Ingenious Way the Ruling Class Has Found to Keep the Economy Humming
by John Lawrence
In short: GIVE MONEY TO RICH PEOPLE.
Yes, remember the 2008 banking crisis when Hank Paulson with his hair on fire demanded that Congress give the banks a bailout of $700 billion? Then after that the Federal Reserve gave $29 trillion to the big banks (rich people), and they continued to this day with quantitative easing (ultra low interest rates and no interest for savings accounts). The $700 billion was a taxpayer commitment, but the $29 trillion was just money the Fed printed, in other words fiat money. The euphemistic term is they "took it on their balance sheet".
But wait that's not all. One more thing. Trump's tax cuts gave even more money to rich people and a smidgeon to the hoi polloi. And the economy is going great. Full employment. Asset prices like the stock market and real estate are up fantastically. All those with 401(k)s couldn't be happier. So what's not to like about this solution to an economy which never has a downturn ... in perpetuity?
Some have suggested that all this money flooding the economy (going mainly to rich people) is a sugar high. Inevitably there will be a crash. The stock market will crater. There will be a ton of foreclosures. Student loans will all go into default Unemployment will reach all time highs. The national debt will have to be paid off instead of added to on an annual basis. But in the meantime the economy has enjoyed the largest bull market for the longest period of time in history. Why couldn't this continue forever? As long as the Fed can print money, it can go on forever.
The game is that, even though the Federal government runs a deficit every year which is added to the national debt ($21 trillion at latest count), the US Treasury continues to sell bonds to investors. If you reach the point where there are no investors willing to buy any more Treasury bonds, the Fed just prints the money, gives it to the big banks and THEY buy the Treasury bonds. Ipso facto, the US government can go on running up huge debts forever and give more tax breaks to rich people.
However, there are some downsides. Hundreds of thousands of homeless people who can't afford outrageously high rents. People who are dying because they can't afford the cost of health care and prescription drugs. Gun violence that causes multiple mass shootings on a daily basis. Just today 12 people killed in a California bar. An infrastructure that is falling apart. But these are minor problems. As far as the homeless, the victims of mass shootings and other gun violence and the people dying for lack of health care and prescription drugs, they are all minorities, and minorities don't count in a majoritarian society. They don't have enough votes to matter so they can be treated with benign neglect. Thoughts and prayers should suffice.
