Prime the Printing Press
That is the call as the bankers bailout of US$700bn gets rejected by US Congress. Meanwhile the US Fed has the printing presses running at just about as much – US$630bn.
Essentially Congress has ensured that for the moment at least the crisis will be treated by money printing instead of bond issuance – by inflation instead of debt.
Inflation aficionado’s such as Steve Keen will see this as a subtle move to ensure that inflationary pressures act to subsidise US debt.
One may remember back to Michael Hudson’s recent comment that the Fed’s involvement in the economy is nothing more than a bailout for the Republican candidate McCain.
Why not go to the source of the problem – the carrot of economic rent – to shut down the boom-bust motivations of 2 dimensional economics? Shifting government revenue sources off wages and onto land would move the emphasis of banks from profiteering on the loans of an inflated property market and towards the lending of capital for productive purposes.
This would reduce the chances of such boom-bust economics occurring in the future by removing the allure of property flipping and it’s ability to deliver speculator’s ‘money in their sleep‘. This is the primal cause to this meltdown and should be taken seriously.