Thursday, August 18, 2011

How to End The Financial Crisis (or Great Recession or Whatever We Call It)

I've been casting about for months for ways to save the world's financial system. It seems to be getting worse and the people in charge don't seem to be doing anything.
One of the problems, a guy on Bloomberg said, is that no one wants to buy anything. People and businesses are still shedding debt. This is called "de-leveraging."

Well, I say we need to leverage. That's what we did before and it seemed to work. In sort, we all need to go out and buy stuff. And don't pay cash. Charge it. Here's why.

Our economy--the world's actually--only works when American consumers do what they do best--consume. It's fun. Don't you remember how fun it was? We replaced our television set last week and the old endomorphins spiked like they hadn't in years. So let's do it. Let's roll! We all need to go out and run our credit cards up to the max.

Okay, okay. So, what if, you say, the credit card bill comes due and we can't pay it?

Easy. Nothing. Don't pay it. What're they gonna do? Take your house? Turn you over to collections? Wreck your credit rating? Who cares? I say "who cares," because if we all go on a big spending splurge and it doesn't turn the economy around, we'll be so bad off it won't matter.

Ok, some banks might get stuck, but they never get really stuck, so we know that won't happen. Americans will simply raise their individual debt ceilings and instead of TARP--Troubled Asset Relief Program--Congress will pass the Consumer Relief Arrears Program, known as CRAP.
Under CRAP we can simply
Look. Big lenders borrowed money from the fed and made crummy loans to homeowners. They sold the loans to Wall Street and paid back the Fed. Then, one day, Wall Street didn't buy what lenders were selling, and the lenders couldn't pay the Fed back. TARP to the rescue.

So leverage up, I say. If Congress gave big banks TARP, I have no doubt they'll give us CRAP if things don't work out as planned.

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