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If the bank goes under, they get to keep all of these salaries and options – and the government will bail out the bank. These guys will take their money and run, which is pretty much what they’re doing now.

Michael Hudson

you’ll load the company you take over with debt. But you don’t have to pay taxes on the profits that you pay out in this way. You can deduct the interest from your tax liability.
MICHAEL HUDSON

Company Liability Over Pay Profit Tax
These $100 bills aren’t meant to circulate. They’re not to spend on goods and services. They’re a store of value. They’re a form of saving.
MICHAEL HUDSON

Circulate Saving Services Spending
Most of these charges that people pay are economically unnecessary. There’s no real cost behind them. There’s no real value behind them. So, they’re what the classical economist called empty pricing. Prices with no real cost value.
MICHAEL HUDSON

People Real Unnecessarily Wall
In fact, there’s no way that banks can be paid everything that they’re owed.
MICHAEL HUDSON

Country Facts Paid People Person Way
“We’ll help you get a better job. We’ll arrange a loan so that you don’t have to pay a penny for this education.” Their pet bank gets them the government-guaranteed loan, and the student may get the junk degree, but doesn’t get a job, so they don’t pay the loan.
MICHAEL HUDSON

Arrange Education Guaranteed Student
New investment and employment fall off, and the economy is falls into a downward spiral.
MICHAEL HUDSON

Downward Economic Employment New Spiral
The parasite can’t simply come in and take something. First of all, it needs to numb the host. It has an enzyme so that the host doesn’t realize the parasite’s there.
MICHAEL HUDSON

Make Over Parasite Something Take
One basic myth is that rich people get wealthy by earning income. But that’s not how most get rich. Most of the gains of the rich people since 1945 have been “capital gains”.
MICHAEL HUDSON

Earning Income People
The one sure mark of a con, though, is the promise of free money.
MICHAEL HUDSON

Free Mark Money Promise
When you say “paying the banks,” what they really mean is paying the bank bondholders. They are basically the One Percent.
MICHAEL HUDSON

Mean Percent Really
In order to be an economist these days, you have to participate in this fairytale that somehow we can recover and still make the banks rich. And it is a fairytale.
MICHAEL HUDSON

Fairytale Order Rich
There are two definitions of deflation. Most people think of it simply as prices going down. But debt deflation is what happens when people have to spend more and more of their income to carry the debts that they’ve run up – to pay their mortgage debt, to pay the credit card debt, to pay student loans.
MICHAEL HUDSON

Running Thinking Two
Now, suppose that a homeowner puts down only 3% of their own money or 3.5% for the FHA. That means if prices go down by only 3%, the house will be in negative equity and it would pay the homeowner just to walk away and say, “The house now is worth less than the mortgage I owe.
MICHAEL HUDSON

Mean Mortgage Moving Thinking
That’s the “magic” of double-taxation treaties: you can shop around for the lowest taxer.
MICHAEL HUDSON

Magic Taxation Treaties
More and more money is being extracted from of the production and consumption economy to pay the FIRE sector. That’s what causes debt deflation and shrinks markets. If you pay the banks, you have less to spend on goods and services.
MICHAEL HUDSON

Debt Deflation Fire Pay
Deflation is a leakage from this circular flow, to pay banks and the real estate, called the FIRE sector – finance, insurance and real estate. These transfer payments leave less and less of the paycheck to be spent on goods and services, so markets shrink.
MICHAEL HUDSON

Estate Fire Pay Real Train

If the bank goes under, they get to keep all of these salaries and options – and the government will bail out the bank. These guys will take their money and run, which is pretty much what they’re doing now.

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If the bank goes under, they get to keep all of these salaries and options – and the government will bail out the bank. These guys will take their money and run, which is pretty much what they’re doing now.

Related Topics

Popular Authors

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