IMF to Bailout US?

“The combination of US deficit spending and tax cuts during the Bush presidency caused an extraordinary expansion of the US economy, an expansion that affected the global economy as well. Unfortunately, the US expansion was based on consumer credit and now that credit has turned into unpayable debt, the US expansion is affecting the world negatively.

The growing US debt is the number one problem facing the world today. The US , the issuer of the world reserve currency, the US dollar, is the world's number one debtor and its borrowing needs have now reached the point of threatening global economic stability. The growth of US deficit spending combined with tax cuts has transformed the US into a debtor unable to pay down debt without borrowing more. According to Hyman Minsky's Financial Instability Hypothesis, debtors finance debt by either by hedge, speculative, or Ponzi finance. The US is now using Ponzi financing to do so. Only by rolling its debt forward and borrowing is the US still able to pay its debts—and its ability to do so has now worsened considerably; and the recent growth in US loan guarantees has made US repayment of its debt even more questionable.

The inability of the US to pay its debt has grave implications for those who loan the US the trillions of dollars the US borrows. With the US debt levels growing even as the US economy weakens, creditors may choose to not loan the US the vast sums of money the US is now committed to spending, a sum Goldman Sachs estimates to be $2 trillion in 2009 alone.

Because the US , the world's lender of last resort, is itself bankrupt, the world economy is in danger of collapse. The IMF has now been asked to bail out Iceland , Pakistan, Hungary and Ukraine . The US may very well be the next IMF client. What has happened this fall has eclipsed everything that has gone before. What will happen next year will eclipse what is now happening this fall. The crisis is growing as the end-game of capitalism approaches its end irrespective of what central banks try to do.

This time the bankers overstepped themselves in such a way they have brought destruction not only on society but on themselves as well. It is only right that they should suffer too—as, after all, it is they who caused our problems. It is unfortunate that society is being forced to lessen the burden on bankers even as bankers continue to indebt society. But, then again, that's what government is for—to act as the bankers' agents in the continuing indebting of nations, businesses, producers and savers. Markets will only be free when the virus of bankers' debt-based paper money is permanently removed from commerce and the present tyranny of banker-controlled government is ended.”

- Darryl Robert Schoon, http://www.marketoracle.co.uk/Article7125.html

When do WE get a bailout?