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Confidence trick

Posted on October 16, 2008

Professor of Economics John Miller says that the federal government's $700 billion financial recovery plan will not address the U.S. housing crisis, according to an article published by Dollars and Sense, which describes itself as the magazine of economic justice.

The bailout will do little to make bad mortgage debt more viable or to provide relief to homeowners behind in their mortgage payments or facing foreclosure. Nor does the bailout place effective limits on CEOs’ pay or their golden parachutes, erect the regulatory safeguards that will curb future financial excesses, or counteract the worsening recession. Worse yet, the bailout swells the federal budget deficit and for that reason will likely sap whatever political will could have been mustered to make the massive public investments necessary to prevent the economy from falling into a prolonged depression.

Source: Dollars and Sense

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