The answer to the question is \u201cYES.\u201d\u00a0 The large bailed-out creditors will end up with the property of the non-bailed-out debtors who are being pushed deeper into debt with \u201cbail-out loans\u201d and fees and penalties for missed debt payments. Write-offs for the One Percent, and more indebtedness for everyone else.<\/span><\/p>\n Turn your mind to the economy.\u00a0 The US has a work force of 164,000,000.\u00a0 The unemployment forecast from the work closedowns is 30%.\u00a0 That would mean 49,000,000 people who are potential rioters.\u00a0(We are half way there with today\u2019s report of a 16% unemployment rate with 22 million unemployed).\u00a0Many of these people were already living paycheck to paycheck, could not raise $400, and their debts leave them no discretionary income.\u00a0 As they could barely service their debts when employed, how do they service them when unemployed and when their small businesses are closed and incurring costs but have no revenues?\u00a0 Loans further indebt them. The cash payouts to the unemployed might cover food and housing but will not service their debts.<\/span><\/p>\n Fast food franchises and stores in malls are saying they are not paying their rents for three months.\u00a0 Mall owners won\u2019t be able to pay their creditors.\u00a0 The bailout works for no one except those who caused the problem. As they are being bailed out, they will have the money to buy up or foreclose on the bankrupted businesses. More property will be concentrated in fewer hands.<\/span><\/p>\n The bail-out scheme concocted by the New York banks and Trump\u2019s Treasury Secretary, who earned the name \u201cthe foreclosure king\u201d during his Wall Street career, leaves creditors whole and debtors deeper in debt.<\/span><\/p>\n The more debt is concentrated in fewer hands and the more indebted everyone else becomes, the less consumer purchasing power there is to drive the economy.\u00a0 The foreclosed assets become less valuable as their profitability declines with consumer purchasing power.<\/span><\/p>\n The destruction of the US economy has been underway since global corporations moved middle class jobs offshore. It has been underway since the financial sector diverted a larger share of consumer income to the service of debt.\u00a0 It has been underway since corporations invested their profits in buying back their own shares instead of expanding their production capabilities.\u00a0 It has been underway since Quantitative Easing inflated stock and bond prices beyond realistic values. It has been going on since the rules against concentration were set aside and the Glass-Steagall Act was repealed.\u00a0 It has been going on since endless wars crowded out infrastructure investment and social safety net expansion.<\/span><\/p>\n Is this a plot or stupidity?\u00a0 Whatever the answer, the economy is being destroyed.<\/span><\/p>\n The economic problem is that private sector debt, both personal and corporate, is too great to be paid.\u00a0 This problem existed prior to the closedown.\u00a0 The closedown means that there is even less income with which to service the unsustainable level of debt.\u00a0 This is not a problem that can be fixed with more debt.<\/span><\/p>\n The problem is that banks lend to finance the purchase of existing financial assets, not to exand the economy\u2019s productive potential.<\/span><\/p>\n The problem is that corporations use their profits and borrow money in order to buy back their own equity instead of investing in their businesses.\u00a0 The executives indebt the corporations while decapitalizing them, and they are rewarded for doing so with \u201cperformance bonuses.\u201d<\/span><\/p>\n The problem is that global corporations thinking short-term moved high-productivity, high-value-added US jobs to Asia, thus reducing earned income in the US, impairing state and local tax base, and causing the Federal Reserve to substitute a growth in consumer debt in place of the lost consumer income growth.<\/span><\/p>\n The people in charge of the fix are only fixing it for themselves and in a short-sighted way.\u00a0 There is only one way to fix the situation, and that is to write down private sector debts to levels that can be serviced.\u00a0 As the creditors are being bailed out regardless, their loan losses don\u2019t matter.<\/span><\/p>\n The bank and corporate bailouts are an opportunity to fix the economy in other important ways. In effect, the bailouts amount to nationalization.\u00a0 The government should accept the ownership that it is purchasing.\u00a0 Then the government can break up the \u201cbanks too big to fail\u201d and separate investment from commercial banking without having to pass new Glass-Steagall legislation and without having to battle against financial lobbying in Congress.\u00a0 Once broken up, the banks could be sold off.\u00a0 This would take enormous vulnerability out of the financial system and restore financial competition.\u00a0 With corporations in government hands, the jobs could be brought home from overseas.\u00a0 The middle class would be restored.<\/span><\/p>\n These measures together with a debt writedown would restore consumer purchasing power. Pent-up demand would propel the economy to higher growth as occurred following World War II.<\/span><\/p>\n This is a real solution to a real problem.\u00a0 But with the One Percent in charge of the problem, we are not going to get a real solution.\u00a0 We are going to get more money used to push up prices of financial assets and paper over unsustainable debt and a dying economy with an artificially-inflated stock market.<\/span><\/p>\n