The rich get richer, and the poor will never be able to retire.
The #GOPTaxScam was the straw that broke the markets’ back. Here’s why and how.
First, America is hugely in debt (known as “overleveraged” in econ wonkspeak).
There’s over $1.4 trillion in student debt, a number never, ever before seen in the US, and nonexistent in the rest of the world because we’re the only developed country in the world that makes students pay so much for college that they can’t attend without taking out loans.
Consumer credit card debt is over $1 trillion (the highest in history), because people have been using household debt (including low-interest of mortgages and car loans for a total of $13 trillion, a record) to maintain what was once a middle-class lifestyle, once easy with a union job.
This trend has been going on ever since Reagan declared war on working people in 1981 and began the process of destroying good union jobs.
As a result, wages have been flat or declining for over 30 years. Corporations, feeding off artificially low interest rates provided by the Fed, are also massively in debt. In fact, one of the most common hustles running over the past 7 years has been to borrow billions at less than 1% interest rate and “invest” that borrowed money in the stock market that’s been giving much higher returns than bonds.
All of these mini-economies (markets) are based on cheap and easy credit that was largely produced by the Fed pouring money into the economy by buying up trillions' worth of US government bonds (debt) and filling the market with low-interest cash.
Because of the repeal of Glass-Steagall, and thus the deregulation of banks and investment houses, banks have actually bought or become investment houses (gamblers; for example, Bank of America now owns Merrill Lynch).
They’re even now making and selling derivatives based on student loans, car loans, and credit card debt, just like they were with mortgages in 2007 (and they’re securitizing mortgages again, too).
Like the GOP deregulation of the “roaring 20s” led to the Republican Great Depression in 1929, this puts the entire economy at risk.
Read more here.
