Income is sucked upward to the creditors, who then foreclose on the assets of debtors. This shrinks tax revenue, forcing public budgets into deficit. And when governments are indebted, they becomemore subject to pressure to privatization of public enterprise.
Michael HudsonThe United States is pushing as policy division of the world into rival currency camps - the dollar area on the one hand, and the Russia-Chinese-Shanghai Cooperation Organization group on the other, especially now that the IMF has changed its rules. People think that if there are rival currency groupings and national currencies are going bust, we might as well use gold as a safe haven.
Michael HudsonWhen I say the economy is shrinking, it's the economy of the 99%, the people who have to work for a living and depend on earning money for what they can spend. The 1% makes its money basically by lending out their money to the 99%, on charging interest and speculating. So the stock market's doubled, the bond market's gone way up, and the 1% are earning more money than ever before, but the 99% are not. They're having to pay the 1%.
Michael HudsonToday, people are having to spend so much of their money, to acquire a house and to get an education that they don't have enough to spend on goods and services, except by running into yet more debt on their credit cards and other borrowings.
Michael HudsonWhen Hillary Clinton said she's going to do just what Obama does and we're going to continue to recover, most people know that we're not recovering at all. We're shrinking.
Michael HudsonMr. Trump wants to turn the U.S. economy into the kind of real estate development that has made him so rich in New York. It will make his fellow developers rich, and it will make the banks that finance this infrastructure rich, but the people are going to have to pay for it in a much higher cost for transportation, much higher cost for all the infrastructure that heโs proposing. You could call Trump's plan "public investment to create private profit". That's really his plan in a summary.
Michael Hudson