The latest injection of Fed Chief Ben Bernanke’s half-baked Banana Republic ideas, administered directly into the veins of American thought by Associated Press suggests that in order to prevent more home foreclosures banks should just write down the principle for people whose mortgages are “under water”. Of course, those who had the good sense to not take on a ridiculous level of debt will not get spit.
Very few will notice that if loan principle can simply be forgiven, then there was never any real capital involved in the loans to begin with, just credit created with a wave of the banker’s magic wand. We live in an age of true financial smoke and mirrors.
“Tom Loonan, vice president of the State Bank of Easton in Minnesota, suggested that debt relief for some who got in over their heads may anger others, who took out mortgages that they could afford. "There's going to be some animosity," he said.”
In other words, those who worked their asses off to get in a position to actually afford to buy a ticket to the housing game are likely to get pissed that they must continue to pay full ticket price while others who could not or would not work so hard or be so conscientious will receive free tickets, all this in order not to not disturb the banker's monetary Circus Maximus.
To do what would be truly fair would also include increasing everyone's savings to reflect the losses people have suffered due to: the implementation of an income tax for no other reason than to secure a permanent source of income to pay the interest on the national debt, the increases in income taxes due to indexing they have suffered due to Fed-induced monetary inflation since 1913, and the loss of purchasing power of their savings, also due to inflation. Of course, that would require re-writing the monetary laws and re-structuring the banking system.
What Bernanke proposes is not “debt forgiveness” in the interest of fairness, because of longstanding private bank parasitism of society or private bank/industry collusion. He proposes “selective debt forgiveness” in the spirit of giving up the bare minimum necessary to save the private banks collective asses from insolvency and unwelcome public attention, due to a problem of their own making.
As long as the system works in the favor of Wall Street and its clients at the expense of the individual investor, the bankers will not do what is fair. They will do whatever it takes to keep the lid on the pot (monetary system) and prevent people from investigating how the stove (banking system) works, and they will do it until the very day the pot explodes.
