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Mathematically, debts grow exponentially at compound interest. Banks recycle the interest into new loans, so debts grow exponentially, faster than the economy can afford to pay.

Michael Hudson

You have to abolish pension plans. You have to abolish social spending. You have to raise taxes.
MICHAEL HUDSON

Pension Plans Simple Thinking
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
The result of this anti-classical revolution you had just before World War I was that today, almost all the economic growth in the last decade has gone to the One Percent. It’s gone to Wall Street, to real estate.
MICHAEL HUDSON

Decade Economic Real Wall War
Every government, from the Obama administration right through to Angela Merkel, the Eurozone and the IMF, promise to save the banks, not the economy.
MICHAEL HUDSON

Administration Government Promise
Since 2008 you’ve had the largest bond market rally in history, as the Federal Reserve flooded the economy with quantitative easing to drive down interest rates.
MICHAEL HUDSON

Gains Income Real
Money is not a factor of production. But in order to have access to credit, in order to get money, in order to get an education, you have to pay the banks.
MICHAEL HUDSON

Factor Get Money Order
Then, all of a sudden, the Fed can raise interest rates, let the stock market prices collapse and the people will lose even more in the stock market than they would have by the negative interest rates in the bank. So it’s a pro-Wall Street financial engineering gimmick.
MICHAEL HUDSON

Collapse Gimmick Interest Negative Peopel
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 economy is being run primarily by the banks for their own interest.
MICHAEL HUDSON

Economy Interest Running
People are putting their money into treasuries because they worry that the risk of putting their money into the bond market, the stock market or even the money markets is very high.
MICHAEL HUDSON

People Risk Worry
When economists speak of money, they neglect that all money and credit is debt. That is the essence of bookkeeping and accounting. There are always two sides to the balance sheet. And one party’s money or savings is another party
MICHAEL HUDSON

Accounting Balance Bookkeeping Party Speak
America needs an ineffective president. That’s much better than an effective president that’s going to go to war with Russia, that’s going to push for the Trans-Pacific Partnership, that’s going to protect Wall Street, and that’s going to oppose neoliberal austerity.
MICHAEL HUDSON

Party Protect Wall War
To the deficit commission, a depression is the solution to the problem, not a problem.
MICHAEL HUDSON

Deficit Problem Solution
The Eurozone die is cast. Countries must withdraw from the euro so that governments can create their own money once again, and resist creditor demands to carve up and privatize their public domain.
MICHAEL HUDSON

Country Euro Government Money Value
Somehow most people believed they could get rich by going into debt to borrow assets that were going to rise in price. But you can’t get rich, ultimately, by going into debt. In the end the creditors always win.
MICHAEL HUDSON

Country Debt People Some Somehow
Europe is acting in a very self-destructive manner, but is doing so because it’s trying to be loyal to the United States.
MICHAEL HUDSON

Europe Self Trying

Mathematically, debts grow exponentially at compound interest. Banks recycle the interest into new loans, so debts grow exponentially, faster than the economy can afford to pay.

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Mathematically, debts grow exponentially at compound interest. Banks recycle the interest into new loans, so debts grow exponentially, faster than the economy can afford to pay.

Related Topics

Popular Authors

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