[Pen-l] Michael Hudson -- The Oligarchs' Escape Plan - at the Treasury's Expense

[Charles Brown <cdb1003@xxxxxxxxxxx>]

              Finance Capitalism Hits a Wall

            The Oligarchs' Escape Plan - at the Treasury's Expense

            By Prof. Michael Hudson

            The financial "wealth creation" 
game is over. Economies emerged 
from World War II relatively free of debt, but the 60-year global run-up has 
run its course. Finance capitalism is 
in a state of collapse, and marginal 
palliatives cannot revive it. The U.S. economy cannot "inflate its way out 
of debt," because this would collapse 
the dollar and end its dreams of 
global empire by forcing foreign countries to go their own way. There is too 
little manufacturing to make the economy 
more "competitive," given its high 
housing costs, transportation, debt and tax overhead. A quarter to a third 
of U.S. real estate has fallen into Negative 
Equity, so no banks will lend 
to them. The economy has hit a debt wall and is falling into Negative 
Equity, where it may remain for as far as 
the eye can see until there is a 
debt write-down.

             February 18, 2009 "Global Research" -- - Mr. Obama's "recovery" 
plan based on infrastructure spending 
will make real estate fortunes for 
well-situated properties along the new public transport routes, but there is 
no sign of cities levying a windfall 
property tax to save their finances. 
Their mayors would rather keep the cities broke than to tax real estate and 
finance. The aim is to re-inflate property
 markets to enable owners to pay 
the banks, not to help the public sector break even. So state and local 
pension plans will remain underfunded 
while more corporate pension plans go 
broke.

Full : http://archives.econ.utah.edu/archives/a-list/2009w07/msg00048.htm





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