Luke Ford

From the Irish Times:

The sweeping plan, which marks the biggest US government intervention in the financial system since the Great Depression, will bring the total cost of its market initiatives in the past fortnight close to $1 trillion.

US treasury secretary Henry Paulson said the scheme was urgently required to avert a credit freeze in the financial system as markets were fragile. Mr Paulson’s plan was developed late last week with US Federal Reserve chairman Ben Bernanke after credit markets seized up as a result of the bankruptcy of investment bank Lehman Brothers, the sale of its rival, Merrill Lynch, and the government rescue of giant insurer AIG.

The US government is to buy pools of distressed mortgage assets from banks to remove them from the financial system. Mr Paulson said the government was taking these steps to protect taxpayers. Democratic presidential candidate Barack Obama said in a radio address that he "fully supports" the efforts to stabilise the financial system.

Yisroel Pensack emails:

The net bottom line is that in order to hopefully avoid a major depression in production output, wages and employment in the real (nonfinancial) U.S. and global economies and a precipitous drop in land values as well as commodity prices, U.S. middle-class taxpayers — who are already heavily taxed to subsidize the countrywide (double entendre intended) policy of under-taxation of land values by all levels of government — will now pay, in higher taxes and in ballooning total interest charges on the national debt, the cost of buying and clearing the trillion-dollar-plus mountain of worthless, formerly privately held mortgage and mortgage-backed debt that was supposedly "secured" by virtually fictitious, speculatively pumped-up land values whose runaway growth from 2000 to 2007 was fueled by the chronic, systemic, extreme under-taxation of land values and by the years-long easy money policy that was adopted by the Fed under Greenspan to stave off a depression after the dot-com stock bubble crashed in the early years of this decade.

Question for America and the world: Why is it considered OK and not unacceptably radical or socialist to nationalize a trillion dollars of mortgage debt based on spurious, speculative land values that have collapsed in unison but not OK to socialize land values themselves and eliminate taxes on earned incomes, true capital, production and trade, a step that would generate prosperity for all and eliminate the possibility of a recurrence of such a financial and economic disaster in the future?

Now is the time for the worldwide Georgist movement to finally come out of the closet. Only Georgism has the fundamental answer to this crisis. No more ad hoc socialist remedies to prop up landlordism and its financial offshoots intentionally mislabeled as "capitalism"!

Furthermore, the officially proposed U.S. government remedy has within it the seeds of future runaway inflation and a future boom in land speculation as the nation’s stupendous debt load will inevitably be largely monetized by the politicians who will never survive in office if they propose raising taxes to the levels needed to actually pay off the nation’s massive public debt.