The Wheels are Coming Off the Recovery Program
By Dave Lindorff
… While the Obama administration and the Treasury and the Fed are bulldozing funds into the coffers of the big banks, allegedly to get them to lend, the banks, from the largest to the smallest, are pulling back, afraid that borrowers will end up going bust on them. So much for economic stimulus efforts.
Not that borrowers have been lining up to get credit. Rather, most people, if they aren’t simply going bankrupt or letting collection agents harass them for nonpayment, are trying to pay off credit card balances, and to cut expenses. In April, the savings rate of Americans, which has been negative in recent years as people tried to maintain living standards by borrowing on their credit cards and their homes, boosted their savings rate to a 14-year high of 5.7%. With official unemployment approaching 10%–a level it may hit this month—and real unemployment, as measured the way it used to be back in 1980, at closer to 20 percent, the majority of Americans not only have friends and family members who are unemployed or working part-time or at odd jobs involuntarily, but are worried about getting the axe themselves.
Meanwhile, the short-lived but incredibly expensive Obama rescue program, like a stagecoach at the end of a spaghetti western chase scene, is about to have the wheels fall off and go sliding over a cliff.
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