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[Cartoon] Bush bail-out plan

[Cartoon] Bush bail-out plan

Bush bail-out plan


The economical, political and social implications of the plan

The real economical reasons behind the “bailout” plan

In order to understand the real economical reasons behind the “bailout” plan, first we need to consider the following:
A financial institution issuing a mortgage IS the owner of the property as long as the loan is not fully paid back, therefore the issuer of the loan simply cannot lose any amounts whatsoever on a defaulting loan. On the contrary: if the loan defaults, the bank wins the ownership of tangible value-holding real estates, which it will eventually sell.
With the project called “bailout” plan, now the banks become double winners, because they can keep and eat the very same cake: in addition to being the owners of the real estates involved, they are paid the price of these assets as well by the extorted taxpayer funds. Therefore the claim that the bailout plan is needed to rescue the economy through “rescuing the bank system” is a major fallacy.

The only true element in the story is the shattered world-economy, but the reason of the crisis is not -or not only- the housing market crisis but the astronomical amount of speculative, economy-controlling funds present in the economy. In order to gain real financial power for the owners the value of these need to be retrospectively produced by actual tangible products and services. Since the increasing amount of monetary units due to the diluting greed-games and speculations are still bound to represent the total values produced, the increasing unit prices (= increasing monetary units / the same or decreasing tangible economical value) are in effect carrying the burden of the speculative, non-productive funds.
The need of rescuing the economy from the danger of hyper-inflation is therefore primarily due to the diluting effect of non-productive speculations and greed-games, and is now met by governmental interventions forcing the production sphere to positively produce the missing tangible assets behind the inflating currency.

However, the bailout “solution” to delay the deepening of the crisis (= to delay hyper-inflation and the subsequent total collapse of the economy) is not simply the wrong solution but it is actually the very opposite of a solution, as it is continuing the same path that has led to the current stage. It will inevitably drive the world-economy into its final collapse by reinforcing the weakening of the productive sphere and strengthening the speculative sphere.

The real reason behind the recent warnings of a slow and painful recovery
despite the bailout bill: although there will be a long process and lot of pain but there will not be recovery in the end, because in addition to the production sphere paying the bill to non-productive hands the productive sphere will also have to produce the values of what they pay. The more tangible values the productive sphere will produce, the more funds the financial sector will withdraw from production and redistribute to non-productive speculative hands, i.e. to the hands of those who have been regulating the financial markets and have driven the world-economy toward the crisis.
So while the banks are double winners of the speculative greed-games the productive citizenry is the double loser.
This is a self-reinforcing vicious cycle, because the production sphere will be forced by political power to recover the astronomical funds that have been withdrawn out it, however in lack of these funds, the resulting shrinking economy will be unable to produce what is unproducable. The result will be increasing work hours for lower and lower compensation, with increasing prices and increasing unemployment (=the combined simultaneous effects of shrinking production and inflation, called “stagflation”, the result of a long-term macroeconomic and monetary mismanagement). In short, the better and more we will produce, the more we will be punished for it, until, due to the shrinking economy most of us will be without work, and the rest will be “happy” to stay alive as low-paid slaves of the global monopolies.

This negative trend will affect the entire productive sphere, including the mid-size and small business owners, both in the US and the EU (*).

2. The political and social implications of the bailout plan

Regarding the political implications of the bailout plan, the plan, as a political act, needs to be assessed in consideration of the definition of “dictatorship”:
“Form of government in which one person or an oligarchy possesses absolute power without effective constitutional checks.
With constitutional democracy, it is one of the two chief forms of government in use today. Modern dictators usually use force or fraud to gain power and then keep it through intimidation, terror, suppression of civil liberties, and control of the mass media....” (Encyclopædia Britannica)

In view of the above, in a country that claims to be governed under a democratic and constitutional rule of law, the following questions should be raised to begin with:
Since when is it in harmony with the democratic US Constitution that the Government can use force, fraud and blackmail against its citizens in order to recover the losses due to certain grand-scale criminal activities?
Is it constitutional and legal to back up such crimes because of their complexity and magnitude and because the funds involved are in the billions? If the magnitude and effect of a crime is so high that it shatters world-economy, then such a crime is allowed? Or is it allowed as long as it can be explained away by spectacular political rethorics and lies?

Since when is it a legal-constitutional practice in a “democratic system of a free country” to grab the honest citizens’ properties by force and redistribute their earned wealth to a criminal sector, to those who have caused the crisis in the first place? Haven’t we learned from history that this act is clearly against the democratic property rights? Isn’t it the number- one violation of the principles of freedom; the number one evil the communist regimes established themselves upon?

Or should we take it that we have reached “perfect freedom”, when freedom means the freedom of committing crimes? As of now will bank-robbery also enjoy government support? If the bank robbers will report that they cannot recover the robbed national treasure, the whole nation – and in fact the whole world - will be forced to help them out?

Considering the recent news from Europe these amounts are likely to add up to above $1,200 billion (!) – i.e. $800 from the US plus $400 from the EU - which means that the above scenario will affect the EU countries as well.

These amounts will eventually be transferred into the very same hands that have directed the world-economy toward the crisis in the first place, and who killed off most of the competition from the “free market economies” by the process commonly known as “globalization”. The primary relevance of this fact is that such an additional astronomical amount in the hands of a small oligarchy that already controls most of the global funds secures a final and total controlling power to this oligarchy over the whole world.
Since their activity is supported by all major political powers, the global bailout plan amounts to a political power-grab over the whole world.

Finally, the global bailout plan and its hostile effects on the global economy should be seen in the light of the following: the very same political lead that stands behind the process of forcing the majority of the citizenry out of the economy by regulating the world-economy toward stagflation, consistently pursue a trend of privatizing all public services, closing hospitals and eliminating all forms of social security and socialized health-care. (This is especially evident from the main trend of the EU policies of the centralized federal EU.) The net effect of this combination is that those who are and will be forced out of the economical arena will at the same time be left the without pension, social care and health-care, which in effect will indeed drastically “downsize” the world population.

This is why, when looking at the hard facts themselves, it is hard to avoid the question: is it just a coincidence or there is a conscious will indeed to downsize the world population, in order to slow down the so called “global warming”?