Bail-Outs, or Susta-Ins?

"Bailout" has two meanings: help and escape. Although the government claims it is trying to help the financial industry escape its debt burden, there is much more going on. As our Rumsfeld Invaders blog has been saying for years now, part of the reason for the Iraq War is to run high federal budget deficits in order to de-fund and prevent government social spending far into the future. The military budget, along with Homeland Security, and now these "bail outs" run up the deficit, which devalues the dollar, which pressures the Fed to raise interest rates, which rewards wealthy bond holders but hurts the middle class and low-income families. Similarly, giving or lending hundreds of billions of dollars to the largest financial companies will put the taxpayer on the hook to the wealthiest stockholders of banks instead of helping those in need. So, it's class warfare, plain and simple.

When I graduated college over ten years ago I was concerned about "selling out to the Man." This is a term often repeated at Berkeley which refers to becoming a pawn in someone else's corporate game. The danger is that selling out results in the subversion of humane values to corporate values. An idealistic students finds himself working (possibly for 40 years) on behalf of faceless financial greed, social and environmental exploitation, and the perpetuation of hundreds of years of Anglo-European imperialism.

The opposite of "selling out" is "buying in." But "buying in" is not easily discovered. Its not so easy to find organizations that allow you to work for social and environmental sustainability, but the optmistic view says that more people and organizations are looking to do this every day.

The connection to the bail out is that instead of bailing out risky financial institutions, let's use those hundreds of billions to support sustainability. Instad of Bail-Out, let's Susta-In. It's public money, so let's use it in the public interest.

By the way, and I'll probably devote a longer blog post to this soon, but the monetary system is based on the creation of debt. Money is created when debt is created. Money is backed by debt. When the debt disappears, money disappears. Fractional reserve banking mean the banks only need to cover 10% or less of their outstanding loans with collateral, so if a fraction of loans cease to be re-paid, then banks quickly become insolvent. The interest rate makes this process even more unstable, because loans must be re-paid with positive compound interest, but the money to pay the interest is only created through more loans with more interest due. So, there is a compounding snowball of debt that follows everyone around. This is the cause of much societal distress. Should we "save" this system? Or let the debt-interest monetary system self-destruct (as it perpetually does), and build a more sustinable monetary system built on equality and long-term sustainability? For more information, here's a link to a great essay by FEASTA that discusses a global monetary reform in more detail.