The Recession and the Stimulus Bill

This is one nasty recession, the worst since the Great Depression. Truth is we are probably heading into a real Depression, not simply a recession. A Depression is when unemployment rises above 10%, and it looks like that’s where we are going, except that the government has been rigging the unemployment rate (along with the inflation rate) for many years now.
One thing we can do is what Hillary suggested earlier, an interest rate freeze. Why should we allow these criminal, fraudulent interest rate balloon payments to go on? It’s loan sharking. Loan sharking is illegal, or it ought to be.
In the comments section, James Schipper suggests nationalizing the banks. This is an excellent idea, and even Alan Greenspan and prominent Republicans are advocating nationalizing some banks. Either that or do what FDR did, and declare a bank holiday with going to back to work only on certain conditions. It wasn’t really a holiday; FDR just shut down all the banks. Then he said if you want to re-open, you need to agree to the following regulations.
As it is, we are shoveling something like $10 trillion at these banks (according to Katherine Austin Phipps and Greg Palast) and we are getting almost nothing in return. According to Palast, one bank was given $25 million of our money and almost immediately blew $15 billion of it on speculation. Would you give a gambling addict your life savings with no guarantees on how it would be spent? That’s what we are doing here.
The stimulus bill is good, but it’s not nearly enough – it will only tide us over until October or November when things will really hit the fan. Commenter Iceman notes that tax cuts are no good in a deep recession, since people will probably sock the money away as savings instead of spending it. That’s probably a good analysis.
On the other hand, taxes on the rich can surely be raised. The top end of the tax burden could be lifted from 35% to 40%, where it was before Bush took office. Obama suggested he would do this in the campaign, but now he is silent. The CEO of Netflix recently wrote an editorial suggesting lifting the top end to 50%. After all, he said, we have the money and working class and poor people don’t. We can afford to pay more. Indeed.
Commenter David Kelsey notes that Republicans cut most of the mass transit money out of the bill, so some lines will probably just have to shut down. Great thing to do in the middle of a recession – shut down mass transit lines.
I do know that something must be done soon. A friend of mine in Italy says his business is off by 70%. It’s simply devastating. All of Europe was tied into the US economy in the worst way.

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