So say BBC financial experts. Which raises the obvious question. They don't trust each other, and in spite of the $150 billion-plus of U.S. taxpayers money, they are still not lending money to one another and credit markets are still stalled. Maybe they understand better than anyone just how untrustworthy they are.
"Banks no longer trust each other because of bad debts."
So, for all we know, we taxpayers may be taking thousands of dollars out of our wallets (and our kids' and grandkids' wallets) to pay for gold-plated executive bonuses and big shareholder pay-offs.
"Treasury has yet to address a number of critical issues, including determining how it will ensure that CPP [the Capital Purchase Program] is achieving its intended goals and monitoring compliance with limitations on executive compensation and dividend payments."
There are likely more credit crises coming down the pike, and we'll probably see a steady stream of credit card companies, car loan executives, and others coming to Congress for bailouts.
But wait, we still need some money to pay for Obama's promising economic recovery program, which has the big advantage of funding needed infrastructure and school repair, and energy efficiency upgrades, instead of the global casino economy. That's all good, but if the Obama administration follows usual practice, the U.S. government will borrow money at interest from those self-same banks we are bailing out, plus a bunch of foreign governments and sovereign wealth funds. Is it just me, or does this not make sense?
It turns out there is another option. The U.S. government does not need to borrow money from private banks -- it can own the banks and thus create the money itself. Or it can just print the money. The right to issue money is in the Constitution, and no, it doesn't have to be inflationary. Attorney and author Ellen Brown explains how it can be done in a remarkable article featured on the YES! magazine website. And before you dismiss it as too good to be true, imagine what it would mean to our taxes and the debt of future generations if we could stop borrowing money, at interest, from the banks, and instead issue money ourselves. Check it out.