I giggle when I hear Republicans talk about how broke we are because of Obama or the Democrats. I cringe when I hear that already debt-ridden citizens will be forced to make more cutbacks while the corporate elite get more subsidies and backdrops.
And since most of these rich people were part of the greatest looting since the time of the robber barons, I find it audacious that Republicans would want to cut their taxes back further while cutting basic support for Americans looking for work.
What looting you ask?
Well, I am no big city economist, but this is the way I view the last decade or so:
First off, why there aren't mortgage raters in jail for wholescale fraud is beyond me. One of the major events in leading up to our implosion was the sprinkling in of CCC and worse rated bonds into AAA-rated mortgage-backed securities (MBS).
Once they were able to pass off these fraudulent securities at prime value, a trillion dollar market opened for the ruling elite to pass off their private debt to investors such as institutions, city and state governments and pretty much anyone in the world.
See, at the time, American finance was considered the gold standard in the world. For all our problems, one could still believe our corporation's ledger books because we had laws and such.
Of course, both the Clinton and the Bush administration had a hand in deregulating the finance industry, which would help lead to the chaos on down the road.
Now, the elite corporate paymasters, more commonly know as the plutonomy, they started making mindshockingly big side bets which we know as credit default swaps. Since they knew the mortgages they had sold institutional investors were junk, they were betting that that junk would fail.
Fail it would, for amazing short-side bet win!
Now, it's not just enough to bet a little that you can destroy the economy of your country, and possibly the world. No, you need to go big or go home to your country estate.
Thanks to deregulation, the corporate paymasters were able to make these amazing small-side bets leveraging up to $1 dollar of real money for each $100 dollars they virtually put on the table in the casino of Wall Street.
Now, Wall Street, comically enough, does have some adult supervision, the SEC. Now, on the off change, and this is a very off chance, that the SEC would investigate these fraudulent insider bets against mortgages the power elite packaged to doomed.
So off-shore we go! I think the Cayman Islands did a lot of the heavy lifting here, but it's better to hide your theft of billions upon billions of dollars where US regulators are not allowed to go.
Just to be on the safe side.
Now comes the tricky part, how much blood do you really want in the streets? Because we all know that is when to buy!
As the longside of these bets go south, the government has to do something. Won't someone please think of the children! So they transfer nearly a trillion dollars in our Federal guarantees, backed by taxpayer's money, to shore up the longside so they can pay off their bets to the plutonomy who rigged this whole game.
See, when those guarantees went to the longside, the shortside got the payment, there as effectively putting all our money in the hands of the very people who set up these shams!
But wait, there's more!
Since the power elite has created a market condition where credit is effectively frozen, the Treasury and Federal Reserve deciced this rich plutocrats needed money to borrow to get the gears of the economy going.
At zero percent! Good times!
Except the corporate aristocracy then turned around and put the money they borrowed at 0% right back into the Federal Reserve where they got a nice 3%-4%. Not only did this not ease the credit crunch, it gave the very people who caused the problem free money to leech even more money off the US taxpayers.
Damn good work if you can get it.
Now our hidden-hand rulers had a problem. To much money on hand. Oh to have such problems!
So with the money that the corporate elite have made off of: 1) shady short-side bets, 2) free money in subsidies, backstops, bailouts and 3) interest-free loans put into interest-bearing bonds, these elite made a final gambit: US Treasuries!
Now taxpayers are paying interest on the treasuries our own money purchased for the corporate aristocracy! This is particularly sweet because they were already enjoying massive tax breaks during this time of self-looped looting.
Since the Federal government has to borrow a lot of money, with our wars and other conquests, the ruling elite of our country was able to run this scam for about $1.5 trillion a year. And that's just the loan to interest!
We've haven't even touched their scams within the markets themselves.
But now these corporate paymasters have way to many T-Bills, but yet are getting free money. How can they get more free money?
I know! Dump those Treasuries onto the market, you got a billion! So dump like a few hundred millions worth on the market and watch the interest rates on your remaining Treasuries skyrocket!
Go on, who is gonna stop you? Geitner? Ha! Berneke? That dude help create this! So you just go belly up the fat trap of obscene profits you plutocrat you.
Even after these corporate aristocrats have dumped a portion of their treasuries on the market, they still have stockpiles upon stockpiles of long-term Treasuries at the high rates they generated with their short term t-bill dumping.
And money is still free to borrow, so why not double on borrowing to buy even more long term treasuries!
As interest rates rise, the interest payments we will be forced to pay these corporate paymasters will soon eclipse all other Federal spending! The very people who stole this money, who used tax payers money to enrich themselves, will now demand US tax payers bankroll their corruption for another generation through the use of these long term treasuries.
The very tax revenue that the treasuries were suppose to produce for public good has been transferred to the ruler elites' private hands.
So the next time some Republican, or Democratic corpocrat, comes telling you about austerity or deficits, remember this tale and tell them they are full of it.
Because they are and they know it, because these politicians were the first ones they bought off before they could pull the con of the century.
And now we're broke.
So the next time the talking heads who are property of the ruling elite tell you we have to cut education, we have to cut unemployment, we have to cut healthcare to poor families and so forth, remind them.
Remind them that the rich have looted this country like we were a third world banana republic.
Remind them that the corporate elite also pay almost no taxes.
Then ask, can we have austerity for the plutonomy who created this situation?
Find me one person outside of the corporate paymasters, or those under their pay, who do not find this alternative attractive.