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Politics : President Barack Obama
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To: Road Walker who wrote (115266)6/14/2012 8:08:20 AM
From: RetiredNow  Read Replies (1) of 149317
 
Hmmm. Interesting. The problem is that everyone, including that Spanish minister, believes that the root cause of all this economic malaise is a SHORTAGE of credit. Say what? The real root cause is too much damned debt that no one can repay. So how do you solve too much debt with more debt? The short answer is you don't. Deleveraging must take place and there are only three ways to do it:
1) Pay it back out of real earnings.
2) Print money to pay it back with cheaper dollars, which is a technical default.
3) Default on it and don't pay it back.

Options 1 puts the burden on the folks who borrowed too much. Option 2 puts the burden on the bankers who loaned too much to people who couldn't pay. Option 2 let's the debtors and creditors off the hook and penalizes the innocent citizenry who didn't do a damned thing to create the problem.

Anyway, the US has chosen option 2, because folks like tejek and the Dems would prefer to pretend they are helping the 99%, while stabbing them in the back. The Europeans are so far choosing Option 1, because the Germans are holding them to it and they are all squealing like petulant babies. One thing is for sure. Option 2 is the most politically easy course to take and it sure does go down well, because no one feels the pain too much, even though it will most certainly perpetuate a system where financial risk taking profits are privatized by the 1% and the losses are socialized and put on the backs of the 99%. It's a shitty system, but this is what we deserve, since we don't like to put the pain on the people who deserve it.
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