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Joeseph Stiglitz: Bad Bank Plan is Swapping ‘Cash for Trash’

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.GJvNfWtCX0&refer=home
Feb. 1 (Bloomberg) — Nobel laureate Joseph Stiglitz said any decision by President Barack Obama to establish a so-called bad bank to rid financial companies of toxic assets risks swelling the national debt. Obama’s administration is moving closer to buying the illiquid assets currently clogging bank’s balance sheets and preventing them from boosting lending, people familiar with the matter said this week. That amounts to swapping taxpayers’ “cash for trash,” Stiglitz said yesterday in a panel discussion at the World Economic Forum in Davos, Switzerland. “You shouldn’t chase good money after bad. We’re talking about a national debt that’s very hard to manage.”
… The stupidity of Keynesian economics: “The government should pay people to dig holes in the ground and then fill them up.”-John Maynard Keynes
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February 2, 2009 - Posted by | Financial High Treason

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