Gary North on the State of the Crisis

05-12-2010 • EconomicPolicyJournal.com

It is beginning to dawn on a minority of voters that the political game is rigged in favor of big banks. It has taken a century for this to begin to register. This is a threat to Establishments everywhere. This was the #1 secret that the Establishments have attempted to conceal... The Establishments for a century have used the greed of the voters to create a money tree for bankers. Here is how it has worked, ever since the years just prior to World War I. The politicians promise the voters revenue from the rich. The voters are promised government jobs, government support for labor unions, and old age pensions. The welfare state grows. The politicians refuse to raise taxes enough to meet these commitments. They use "pay as you go" accounting. The governments run debts. Investors buy these debts, because they are guaranteed by the government. The debts are seen as risk-free. Wars break out. Governments then run larger deficits. These debts are never repaid. They always increase. Old debts are rolled over.