People have to pay so much money to the banks that they don't have enough money to buy the goods and services they produce. So there's not much new investment, there's not new employment (except minimum-wage "service" jobs), markets are shrinking, and people are defaulting. So many companies can't pay their banks.
Michael HudsonWhen you say "bank," a bank is a building, a set of computers and chairs and things. The bankers are the people running these banks. They're the chief officers, and they push the loans because they don't care if they go bad. For one thing, they may package these bad loans and sell them off to gullible institutional investors.
Michael HudsonUS opposition to Russia and China has entailed sanctions against Russia, and Russia in turn has made counter-sanctions against Europe. So Europe is essentially sacrificing its opportunities for trade and investment in order to remain part of NATO. It is also agreeing to bomb Syria and the Near East, creating a wave of refugees that it doesn't know what to do with.
Michael HudsonDebts grow and grow. And the more they grow, the more they shrink the economy. When you shrink the economy, you shrink the ability to pay the debts, so it's all an illusion that the system can be saved. The question is, how long are people going to be willing to live in this illusion?
Michael HudsonWhen there's deflation, it means that although most markets are shrinking and people have less to spend, the 1% that hold the 99% in debt are getting all the growth in wealth and income. Deflation means that income is being transferred to the 1%, that is, to the creditors and property owners.
Michael HudsonToday's national income statistics make it appear that Goldman Sachs is productive. As if Donald Trump plays a productive role. The aim is to make it appear that people who take money from the rest of the economy without working are productive, despite not really providing any service that actually contributes to GDP and economic growth.
Michael Hudson