Welcome to the Asylum by Arthur Silber



Strolling here and there on the interdolts, I read this:
The Bush administration on Saturday formally proposed to Congress what could become the largest financial bailout in United States history, requesting unfettered authority for the Treasury Department to buy up to $700 billion in mortgage-related assets.

The proposal, not quite three pages long, was stunning for its stark simplicity. It would raise the national debt ceiling to $11.3 trillion. And it would place no restrictions on the administration other than requiring semiannual reports to Congress, granting the Treasury secretary unprecedented power to buy and resell mortgage debt.

...

The ambitious effort to transfer the bad debts of Wall Street, at least temporarily, into the obligations of American taxpayers, was first put forward by the administration late last week, after a series of bold interventions on behalf of ailing private firms seemed unlikely to prevent a crash of world financial markets.

A $700-billion expenditure on distressed mortgage-related assets would be roughly what the country has spent so far in direct costs on the Iraq war and more than the Pentagon’s total yearly budget appropriation. Divided across the population, it would amount to more than $2,000 for every man, woman and child in the United States.

Whatever is spent will add to a budget deficit already projected at more than $500 billion next year. And it comes on top of the $85-billion government rescue of the insurance giant, American International Group, and a plan to spend up to $200 billion to shore up the mortgage finance giants, Fannie Mae and Freddie Mac.
You feeling lucky? You should be. It's not every serf who enjoys the overwhelming honor of paying off his rulers' idiotically stupid bad debts, thus ensuring that his rulers maintain their incredibly privileged position among the wealthiest and most powerful of Americans. You lucky dog! I just love that "at least temporarily." You falling for that one again? You dog, you!

Earlier in my travels through the interdolts, I had looked at the proposal that "was stunning for its stark simplicity." No kidding. All of it is mindboggling, but it was when I saw this provision that my eyes started to fall out of their sockets:
Sec. 10. Increase in Statutory Limit on the Public Debt.

Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.
It's hardly as if I had never thought about this issue before, but it takes on added, terrible meaning in light of this week's events. Make real to yourself all the implications of that short statement. Try to make real to yourself the enormity of that debt figure. You can't make it real to yourself. I certainly can't. How in the world does any adult -- any adult who is not suffering fatal impairment of his cognitive faculties -- convince himself that this kind of make-believe can continue indefinitely? The United States government is completely broke and drowning in debt that extends through the next three, five, ten, who knows how many generations. Finished. Washed up. Oh, yes, it might take a long time for the unwinding to occur, and the lives of many Americans may continue pretty much as they are for quite a while. Or, depending on events, the fantasy might begin to disintegrate at a much faster pace and very quickly turn into a nightmare. There are so many factors involved that it's impossible to predict exactly how it will play out.

And Congress will quickly approve this plan or one like it in its essentials. After all, they have to do something! And it's an election year! They have to show they're in charge! They're taking care of business! And they want to get out of Washington so they can rush back home and make sure they're reelected -- so they can continue their work of destroying what little remains of this country.

As Mike Whitney said:
Not a dime of public money is provided for over-extended mortgage-owners trying to stay in their homes. Not one congressman or senator at Thursday's meeting rejected the bailout plan or called for a criminal investigation to establish whether laws were broken in the sale of fraudulent securities which have clogged the global system; pushed banks, hedge funds, insurance companies and homeowners into default, and precipitated the greatest financial crisis in the nation's 230 year history.

Ironically, the very people who created this mess, are the ones who will decide how to resolve it; the Federal Reserve and the US Treasury. Where else, but Washington would such massive failure be rewarded with more power and authority.
As I wrote last week:
What you have seen over the last six months and more, and what you will see in the coming months and years, is the same phenomenon in the realm of economic policy [as has occurred with regard to foreign policy]. All of the solons who led us into this abyss of mounting debt, worthless securities, failing financial institutions, economic contraction and collapse ... and all the rest, will now instruct us as to how we should "solve" the crisis that they have created. The crisis may be ameliorated to a degree, and the worst of the consequences may be postponed for a while. But whatever "solutions" are implemented, whatever reorganization and reregulation is imposed, it will all be done in accordance with the ruling class's desires and goals. It will all be to protect their own wealth and power to whatever extent is possible, and to expand their wealth and power still more...
It's like the lousiest, most moronic sitcom ever made, crossed with the goriest, most nauseating slasher movie ever imagined. A stupidly grinning idiot wielding an axe in one hand and a butcher's knife in the other, as he dismembers the millions of bodies spread before him.

This is America today, a sickening joke run by people who are incapable of understanding the most rudimentary facts, drunk on power, and who perform only one action in a fully convincing manner: demonstrating their absolute determination to make their ignorance total and irreversible, as the blood of their victims rises around them.

Welcome to the asylum for the homicidally insane.
posted by Arthur Silber at 1:01 PM