How the US economic and political systems almost collapsed completely on September 18, 2008
Hey...remember back when the Bush administration and Congress were trying to pass the bank bailout bill and every politician that went before a camera during this time appeared as if they'd come from a meeting with the Devil himself? I sure do! I can remember myself thinking, "these dudes look as though things are a lot more fucked up than they're letting on." I suppose this was to prevent utter panic from ensuing...they had to go out and walk a fine line...sell the American people on the urgency of the bailout, while not causing them to get scared shitless and make a run on the banks.
Well, after watching this clip from an interview given by Rep. Paul Kanjorski to C-Span, it sort of all makes sense. The bottom was dangerously close to falling out. Like, martial law was merely hours away from being called...
(Via Daily Kos)
Here's the transcript of the most vital part of what Kanjorski said, compliments of Kos...
I was there when the secretary and the chairman of the Federal Reserve came those days and talked to members of Congress about what was going on... Here's the facts. We don't even talk about these things.
On Thursday, at about 11 o'clock in the morning, the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States to a tune of $550 billion being drawn out in a matter of an hour or two.
The Treasury opened up its window to help. They pumped $105 billion into the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks.
They decided to close the operation, close down the money accounts, and announce a guarantee of $250,000 per account so there wouldn't be further panic and there. And that's what actually happened.
If they had not done that their estimation was that by two o'clock that afternoon, $5.5 trillion would have been drawn out of the money market system of the United States, would have collapsed the entire economy of the United States, and within 24 hours the world economy would have collapsed.
Now we talked at that time about what would have happened if that happened. It would have been the end of our economic system and our political system as we know it.
How's that for sobering?
And thanks for the tip Jennifer!
6 comments:
... wow.
Sometimes I'm content to be ignorant and to not understand the complexities of matters such as this.
Daily Kos? Are you serious?
You're joking!
A complete collapse of the economy is equivalent to all particles in the universe achieving absolute zero...it's total bullshit. That would mean people would quit going to work and just sit in their houses, with the master power breaker off, and not eat or drink.
I'm trying to get my priorities straight when the looting begins.
Food
Narcotics
Big screen T.V.
RJ
The Federal Reserve should be dismantled. Why do private banks get to control the value of United States currency? Why does the U.S. not print our own money, as outlined in the Constitution?
That's pretty incredible, I can not believe it was THAT close, I was sitting exams around that time and unbeknown to me the world was close to going down the shitter.
I wonder - just out of curiosity - what would the total collapse of economy - both US and of the world - look like. Do you think people would stop going to work all at once? That's hard to believe. It's been seen many times that even when people are not getting paid, when their pay is delayed, they keep going to work, since there's nothing else to do. I think with the "total collapse" - there would be a new system put up soon after, to suit the new conditions.
Elli
P.S. I'm not suggesting that there's nothing to fear. But it'd be good to define what actually is the total collapse of economy.
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