Posted on 05/07/2009 6:09:47 AM PDT by Scanian
The current economic crisis so far eclipses anything the American economy has undergone since the Great Depression that "recession" is too tepid a term to describe it. Its gravity is measured not by the unemployment rate but by the dizzying array of programs that the government is deploying and the staggering amounts of money that it is spending or pledging -- almost $13 trillion in loans, other investments and guarantees -- in an effort to avoid a repetition of the 1930s.
Much of this sum will not be spent (the guarantees), and probably most will eventually be recovered. But a commitment of such magnitude -- stacked on top of enormous budget deficits enlarged by sharply falling federal-tax revenues -- could lead to high inflation, greatly increased interest costs on a greatly increased national debt, much heavier taxes, the restructuring of major industries, and the redrawing of the line that separates business from government.
How did this happen? And what is to be done?
The key to understanding is that a capitalist economy, while immensely dynamic and productive, is not inherently stable. At its heart is a banking system that enables large-scale borrowing and lending, without which most businesses cannot bridge the gap between incurring costs and receiving revenues and most consumers cannot achieve their desired level of consumption. When the banking system breaks down and credit consequently seizes up, economic activity plummets.
(Excerpt) Read more at online.wsj.com ...
You, we, cannot allow a company to get so large that it becomes to big to fail. That is what anti trust is for!!!
The state is pushing capitalism into crisis so we can be saved by - dun dun dun da - Capt. Socialism.
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