The Stimulus

Obama's stimulus does not address the real problem with the economy. Ever since the end of the Viet Nam war there has been effort to lower the wages of working people. This effort took a qualitative step forward when Reagan fired the air traffic controllers.

Since workers real wages were falling, the corporations and banks needed a plan to get workers to buy all the commodities they were producing. There solution was to create more credit. If you can not afford something, buy it on credit.

Home mortgages were liberalized, Visa and Master Card grew dramatically, car loans went from two or three years to five to seven years, and of course home equity loans were invented.

Over time more and more exotic vehicles of credit were invented to keep the bubble expanding.

It reached the point with sub-prime loans, that people who had essentially no money and a low paying job were able to buy a house for hundreds of thousands of dollars. The banks and financial institutions felt they could bleed these people of what ever money they had, foreclose on the house and sell it to the next client for a higher price.

This debt bubble is now in the process of collapsing. The federal government and the Federal Reserve by one means or another are transferring the responsibility for this debt to the the taxpayers. Since corporate taxes are for the most part voluntary, this means wage earners.

Well if workers could not afford the debt in the first place, why do Obama and his crew think they can borrow their way out of debt?

Unfortunately over the last 400 years most financial crisis have ended in wars. That is certainly how the Great Depression ended. Is that where we are headed now?