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The Empire of Debt by Dee Hon

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From Adbusters # 74, November-December 2007Das Empire of DebtGeld for nothing. A house for no money from. Do not pay up for your devices 2012th This is the new American dream, and in recent years, millions have been living lightly. Dead is the old version, which introduced a historian James Truslow Adams in the world as “the dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.” Such Puritan ideals – do not die from natural causes of age and aging – to work hard to save for a better life. We killed them, willfully and deliberately to create a new golden age. As a society, we said that we could all get rich, put our feet on the deck of the new cottages, and let our money work for us. Collecting is for the unenlightened. Equity is the new golden calf. Unfortunately, this is a hollow dream. Yes, luxury real estate giant has been hit new heights. Ferrari sales have never been better. But a large part of the growing wealth is an illusory façade masking a teetering tower of debt – has seen the largest in the world. It will collapse is a disaster in our own Herstellung.Verzweiflung already rumbling through Wall Street. Subprime mortgages leapt to public attention this summer, always the watchword for the season. Hedge funds, the masterminds command salaries in the tens of millions for their supposed financial foresight, but have little supervision or management, betting investors their “multi-multi-billion on the ability that subprime borrowers – the very definition have lower incomes and or bad credit histories – would miraculously find means to pay back loans beyond what they deserve They did not, and rising loan defaults send shock waves through the markets, but despite the turmoil this collapse is evil, it is only the first.. Ripple hit the shore. America’s debt crisis is tief.Wie had come there to that? How has America collectively and as individuals, a nation addicted to guilt, pushed to and over the edge of bankruptcy? The savings rate is below zero. personal bankruptcies reach record highs . America’s total debt an average of more than 0,000 for every man, woman and child. On a broader level, China holds nearly trillion U.S. debt. Japan and other countries are also beginning due groß.Die history with the work. The decades following the Second World War were boom years. Economic growth was strong and powerful industrial unions, the middle-class dream made available for working citizens. workers bought houses and cars in such numbers as they led to the modern suburb. But prosperity for wage earners reached its zenith in the early 1970s . Until then, corporate America began shredding the implicit social contract they had with their workers increased from fear of foreign competition. reduce company costs by searching for work abroad, creating a braking effect achieved on the Löhne.Im 1972 peak wages .. According to the U.S. Department of Labor Statistics, earning workers a week, in inflation-adjusted $ 1,982 since then it has been a downhill ride today real wages are nearly one-fifth lower -. even though real GDP per capita doubling over the same period. fell even as the wages, consumerism was encouraged to continue rising to new heights now. stuff was a patriotic duty to the citizens of their emerging communist enemies of the Cold War. In the eighties, consumers were growing fearlessness towards debt and their hunger for goods with Ronald Reagan met deregulation of the banking industry. Credit is not only more accessible, it has been marketed heavily. Credit card debt at 0 billion euros is now three times what it was in 1988, adjusted for inflation. crickets and TV screens are now the size in small cars. To fill the better the average new home in 2005, more than 50 percent larger than the average home in 1973.Das all good news for the business sector, which earned both money lending to consumers and the profits from their spending. Better still means lower wages, lower costs and higher profits. These factors helped the stock market boom, a record begins in the early 80′s that continues almost seamlessly to create conditions heute.Diese vast riches for one class of individuals in particular: who, what includes an economic rent, which are “earned” the income from the ownership of an asset to control known to some forms of economic rent dividends from shares or capital gains from the sale of shares or property, the alchemy of the rent.. is that there is no effort to erfordert.Regierungen to produce money to encourage their part rent investors or reindeer class. Economic, in the form of capital gains, is taxed at a lower rate than earned income in almost every industrialized country. In the United States in particular capital gains are taxed at ever shorter sentences. A person whose job pays 0000 to 35 percent of the taxes in comparison to the 15 percent tax rate for someone whose stock portfolio brings home the same amount verdanken.Vor the choice between working for diminishing returns and joining the leisurely riches of the rentier pursue, the people of the latter. When the reindeer class is fabulously rich, why can not anyone become a member? people looking for all professions to have your money work for themselves, money into investments. This caused the explosion of the financial industry, people, money manage for others. The now trillion mutual fund industry is 700 times as great as it was in the 1970s. hedge funds, money managers for the super rich, 500, numbered in 1990 ., managing billions in assets, now has more than 6,000 hedge company serves more than trillions of dollars in Vermögenswerten.Käufer of homes and private equity firms: In recent years, the additional lure of low interest rates, a boom for two kinds produced by rentiers at the crux of the current debt crisis. But it should also be noted that lower interest rates gets outsourced itself the product of labor werden.Amerika goods from China. China dollars on the USA. In order to keep the value of its currency low, that exports stay cheap, China does not spend those dollars in China, but buys us assets like bonds. China now has approximately 0 billion in such bonds. This massive borrowing of money from China (and to a lesser extent, from Japan) sent us . the interest on a Rekordtief.Nun is the hamster wheel really gets spinning encouraged Cheap borrowing costs to borrow millions more Americans to buy houses and send property prices to record highs rising house prices, banks encouraged free credit, nor sent more buyers into the market -. many, the hype that began offering the investment company for real estate is a never-ending escalator to riches and hard to get their dreams finance advance borrowed thought. The people borrowing against the skyrocketing value of their houses, furniture, household appliances and televisions now. These home equity loans has 0 billion to the U.S. economy alone in 2004.Es was all so utopian. the boom would feed themselves. No one would ever work again or produce anything of value. Everything had to be done was to buy and sell each hold other houses with the money from the Chinese entlehnt.An the Wall Street private equity firms played a similar game: buying companies with borrowed has billions, sacking employees to cut costs, and then sell the company to someone else the same. These leveraged buyouts inflated stock prices, embossing billionaires around the virtues that produce profit -. innovation, entrepreneurship and good management – stopped mattering as long as it is rich Gewinne.Aber the party come to a standstill An endless housing boom requires an endless supply of ever larger. fool to pay more for the same property. The rich, as Voltaire said, require an abundant supply of the poor. mortgage lenders have cut even deeper into the ranks of the poor customers to find their loans. The practices mentioned teaser loans, low interest rates, which jumped after the first few years promised. subprime borrowers were told the future pain would never come, as could hold the refinancing against the ever-growing value of their homes. Lenders repackaged the shaky loans as bonds, money-hungry investors like hedge funds to verkaufen.Natürlich the supply of suckers is inevitably ran out. housing prices flattened, leading to the beginning promises a long, downward slide. fed Just as the housing boom to itself, so will its collapse. The first wave of subprime borrowers failed. are a flood sent by foreclosures real estate prices continue to fall. Lenders somehow have news that poor people are charged with bad credit they could not back out of the blue. Startled, she stilled the flow of easy credit, further reducing the supply of homebuyers and squeezing debt-fueled private equity. Hedge funds make merry bought subprime loans zusammengebrochen.Mehr borrowers soon no more payments for their homes and credit dried up as the supply of rental. The private consumption and thereby lowering the corporate profits. The shrinking economy will continue to press the wages of the workers. For most people the dream of easy money is never true, because only the truly rich can live with it. All others are likely to continue to work for less, shackled to a mountain of Schulden._Dee HON is a Vancouver based author of the Tyee and Vancouver magazine contributed hat.Adbusters Magazine adbusters.org/the_magazine/74/The_Empire_of_Debt.html

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