Good analysis.
It would be worth 47 minutes of time to view the attached and learn why the banking system has a built-in failure clause.
http://video.google.com/
videopla...474362583451279
It also explains one of the reasons why the government economists believe that increased debt (even by the government) will stimulate the economy by making more money available.
Anyone who understands basic math can understand that if a person, company, or government continues to spend more than it/they earn, it/they have to pay interest on their debt which reduces the amount of income available for current spending, which leads to more borrowing, more debt, more interest, and LESS available for expenses.
This is a mathematical progression which will eventually result in all income being needed for interest expenses.
Another current fallacy of the government economists is the "trickle down" theory. Giving money to the rich will result is it "trickling down" to the middle class. This has proven false on so many levels, but is still the mantra of government economists. It would have made much more sense to divide the bailout money among all Americans. The banks and financial institutions would have ended up with a large portion of it through people making payments on their credit cards and mortgages and people would have had both money and credit to be buying more and getting the economy moving.
A third fallacy is that Americans can support more debt, or need to shop for more things. Especially more cars and credit. America already has more cars and debt than they can pay for, and this will only get worse as people lose their jobs because of lack of demand for goods and services caused by a lack of money and credit.
Commenting by HaloScan
