Treasury Secretary Henry Paulson this Sunday defended the Federal Reserves decision to bail out the Bear Stearns investment bank increasing the debt American taxpayers will hold for the profits expected by bankers before the crash. Paulson assured “The government is prepared to do what it takes” and will print money at taxpayer expense to assure the profits of these huge banks.
Bear Stearns had made a fortune in inflating the prices of homes and leveraging huge loans on the mortgage-backed securities, which now face collapse. The Federal Reserve used a depression era tactic to infuse capitol, that is to print up money out of nowhere, charge the government interest for it, and give the banks back their principal profit, which they were squeezing from the inflated market and writing off. All this money will pass to the government debt for Americans tax slaves to bear the burden.
Americans move numbly along hoping that their dollar might buy bread and pay the bill for their homes. Only President Bush and Pelosi saee any silver lining. As the economy hits depression they still only admit being near a recession as they are doing just fine.