AlterNet: Our Economy May Be in a Death Spiral -- Will Washington Stop the Bleeding?

[marmar]

Our Economy May Be in a Death Spiral -- Will Washington Stop the Bleeding?

By Joshua Holland, AlterNet. Posted November 15, 2008.

The Bush-Paulson plan isn't doing anything to address the underlying problems threatening America's economic future.



In September, Treasury Secretary Hank Paulson sold his $700 billion bailout to Congress on the premise that banks were hoarding money to prop up their balance sheets and that this was bringing the economy to a screeching halt.

Paulson has thrown a big chunk of that money at the banks -- all but $60 billion of the first $350 billion authorized by Congress has been committed -- and they've started lending to each other. But it has done virtually nothing to prevent the worst-case economic scenario we are all worried may come to pass -- a meltdown of the "brick and mortar" economy -- because the banks still aren't lending to the general public.

That's not just a result of the banks restricting loans that would allow businesses to stay afloat, if not expand, and individuals to buy so much of the stuff that the global economy produces. It's also because there are fewer American families and businesses that are credit-worthy.

In the housing market, that's indicated by a drop-off in the number of new loan applications. Mortgage applications are down by about a third from this time last year. As economist Dean Baker noted this week, "If people with good credit were being turned down, we would expect the number of applications to be rising, as they apply to several banks before finally finding one that will issue a loan. The fact that applications are actually declining ... is solid evidence that the problem is not that otherwise credit-worthy borrowers can't get loans. The problem is that people are not credit-worthy." .......(more)

The complete piece is at: http://www.alternet.org/workplace/106993/our_economy_may_be_in_a_death_spiral_--_will_washington_stop_the_bleeding/

[SpiralHawk]

1. "Just wait till Pluto enters Capricorn. Smirk." - Ronald Reagan's Dead Republicon Astrologer*

"That happens in 2 weeks, and Pluto stays in Cap until 2024. All of us republicon occultists are ready for it, and poised with catapult loads of republicon mind-f*ck propaganda to blame all the Soon-to-unfold SHIT STORMS on Obama and the Dems. Bwaaa ha ha ha ha ha. Smirk."

- Ronald Reagan's Dead Republicon Astrologer*


* Courageously channeled by the Intrepid SH from the vast stunningly stanky Netherworld of Republicon Occultism.

[SpiralHawk]

2. Republiconomic Death Spiral

Thanks a pantload, republicons

[MannyGoldstein]

3. Lets Give More Money To Rich People

Then they'll give even more than that to the rest of us. The Rich are magical and selfless, multiplying money than giving it away to others.

[SpiralHawk]

4. "Brilliant idea." - Republicon crony fatcats