Almost no one is talking about the most serious financial catastrophe taking place in the U.S. today. Instead everyone is focused on reigning in Congressional spending, particularly in areas like entitlements and Obamacare. But there is a part of government that flies under the radar, unaccountably increasing our debt to far more dangerous levels. It is considered the financial part of the Executive Branch, but there are very few checks and balances coming from the other two branches of government. It is the powerful Department of the Treasury and the quasi-governmental Federal Reserve. Timothy Geithner, Secretary of the Treasury, and Ben Bernanke, Chairman of the Federal Reserve Board, are two of the individuals most responsible for this financial meltdown, although it began prior to their terms in office. The Fed and the Treasury are responsible for engineering financial institution bailouts that cost taxpayers $12.1 trillion through February 2009. This massively dwarfs the $3.83 trillion spent on Medicare/Medicaid, Social Security, defense, and other government programs.
A few people are starting to speak up about this shadow budget. Former CEO and stock trader Karl Denninger is leading the expose. Glenn Beck and Elliot Spitzer are covering it on their talk shows. Rolling Stone Magazine featured a stunning expose this month about two wives of Morgan Stanley executives who received $220 million in bailout funds. The new documentary “Inside Job” uncovers who was really responsible for the 2008 financial meltdown. Tea Party activist and social media guru Eric Odom wrote an article last week about it entitled “The Greatest Financial Theft in the History of Man.”
Odom calls the bailouts a Ponzi scheme. The simple explanation of how they work is this: The big banks on Wall Street invest in risky ventures, like granting high-risk mortgages to people who really cannot afford them. When the investments inevitably fall through, leaving the banks on the brink of failing, the well-connected, powerful bank CEOs use their connections to the Federal Reserve and the Department of the Treasury to get the government to bail them out.