The U.S. economy is definitely in an "economic downturn" the latest bailout (corporate welfare) of Bear Stearns has to be the biggest cover-up of a defunct financial market in U.S. history. Bear Stearns's capital base of $17 billion had dwindled to $2 billion in cash, and Bear Stearns told government officials that it saw little option other than to file for bankruptcy the next day. Had the government let this Investment Bank go bankrupt the entire banking industry would have stopped dead in it's tracks; no loans, hoarding of cash and the depositors (you and I) would be in a panic.

Run on the Bank

Could you imagine what you would do if the 24-news cycle told of a bank that went broke and left it's customers with no way to claim their money (Investment Banks are not federally insured [FDIC]). I know I would go down to my bank and ask a few questions while withdrawing my change (along with millions of other depositors). Thus creating a classic "run on the banks" which hasn't been seen since "the great depression" of 1929 -1939.

So this is the reason that a Sunday night deal was made to save the financial markets by rescuing Bear Stearns. Not only was the Federal Reserve Bank saving the banks but indirectly heading off a financial crisis of magnanimous proportions. Was it a corporate bail out? or did they spare America a "real depression" at the expense of our  reputation abroad. The recent reforms proposed by Treasury Secretary Paulson was of direct results spurned by the mortgage crisis. So here is the fallout which will hurt us (America) abroad, continue to keep the dollar devalued, inflation rising and worldwide confidence in the greatest economy at a low.

This is an excerpt of an article ran in the

USA 2008: The Great Depression

Food stamps are the symbol of poverty in the US. In the era of the credit crunch, a record 28 million Americans are now relying on them to survive – a sure sign the world's richest country faces economic crisis

By David Usborne in New York
Tuesday, 1 April 2008

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We knew things were bad on Wall Street, but on Main Street it may be worse. Startling official statistics show that as a new economic recession stalks the United States, a record number of Americans will shortly be depending on food stamps just to feed themselves and their families.

Dismal projections by the Congressional Budget Office in Washington suggest that in the fiscal year starting in October, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance program was introduced in the 1960s.

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