It’s time for the banks to bail out the U.S.
Image by Ed Yourdon via Flickr
Apparently, we may soon need a bailout ourselves. Here’s a NYTimes synopsis of a report from Moody’s Investor Services — which, you will recall, has been castigated for too liberally doling out high ratings to iffy companies and financial instruments:
The United States, Germany and other major economies have moved “substantially” closer to losing their top-notch credit ratings and can not depend solely on economic growth to save them.
The ratings of the Aaa governments — which also include Britain, France, Spain and the Nordic countries — are currently “stable,” Moody’s Investors Service wrote in the report. But, it added, “their ‘distance-to-downgrade’ has in all cases substantially diminished.”
As goes GM, so goes the nation…literally?
Probably not. Still, the mirror image of that popular industrial mantra, “you can’t cut your way to growth,” exists at the country level: “You can’t grow your way to profit.”
If Moody’s is right, then no amount of economic stimulus or business recovery will take care of the deficit. It will require cuts in social services — the kinds of cuts that have caused strikes and protests in Greece, Portugal and other cash-strapped European states.
But I’m not going to claim to have opinions on what Japan (another downgraded-credit country) or Euoprean countries should do. I do, of course, have opinions on what should happen here.
Well, the main fallout of a lowered credit rating is a high cost to borrow money. But who would we borrow the money from? The normal path is to pay higher interest on bonds and such. But how about we start with Goldman, JPMorgan, other banks that got bailed out of their problems, lending money at low rates to the taxpayers who kept them solvent in the first place?
I’m not suggesting that they have enough resources to close the deficit. But morally and symbolically, it could go a long way to mollify anger, no?
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[...] Already Been Canned)." It was also published in a Mar 15, 2010 True/Slant blog titled "It’s time for the banks to bail out the U.S." And it was published in an Apr 12, 2010 blog titled "Personal Bankruptcies Hit a High [...]
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[...] Already Been Canned)." It was also published in a Mar 15, 2010 True/Slant blog titled "It’s time for the banks to bail out the U.S." And it was published in an Apr 12, 2010 blog titled "Personal Bankruptcies Hit a High [...]
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[...] Already Been Canned)." It was also published in a Mar 15, 2010 True/Slant blog titled "It’s time for the banks to bail out the U.S." And it was published in an Apr 12, 2010 blog titled "Personal Bankruptcies Hit a High [...]
[...] Already Been Canned)." It was also published in a Mar 15, 2010 True/Slant blog titled "It’s time for the banks to bail out the U.S." And it was published in an Apr 12, 2010 blog titled "Personal Bankruptcies Hit a High [...]
[...] Already Been Canned)." It was also published in a Mar 15, 2010 True/Slant blog titled "It’s time for the banks to bail out the U.S." And it was published in an Apr 12, 2010 blog titled "Personal Bankruptcies Hit a High [...]
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[...] Already Been Canned)." It was also published in a Mar 15, 2010 True/Slant blog titled "It’s time for the banks to bail out the U.S." And it was published in an Apr 12, 2010 blog titled "Personal Bankruptcies Hit a High [...]