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(alan1chef @ Jun. 01 2009,13:30) Smuttley, the economy is in the tank now because of runaway growth during the two terms of good-ole-boy Bill, who stopped the Fed from putting on the brakes.
The initial source of all the money that fuelled the runaway growth was the escalation in the money supply by Alan Greenspan under the watch of Bill Clinton.
Eager to deliver a surplus budget, Clinton gave Greenspan the nod to do whatever it took to boost the economy & leave him with a sound fiscal legacy.
The flood of money worked, but after it had worked its way through the system, it had to find a home. Initially it re-appeared as the driver of the dot.com boom. Billions of dollars looking for somewhere to be "parked" drove prices to insane levels.
This inevitably led to a bust but Greenspan, having appeared to be a financial whizz, was given free reign to continue & was madly adding more money to the pot. What were the banks to do with it now? This time it was decided that bricks & mortar was a far safer bet.
With billions to place, 1000's of mortgage brokers appeared around the country, all eager to capture the generous commissions on offer. No practical application was refused but the big bucks were to be made by lending to those who could never qualify for a loan.
Only in America could a system be devised that made more money for the brokers by having them lend to people who couldn't possibly meet the repayments. And to ensure the loans would be made, the brokers didn't hesitate to commit fraud on the applications.
Soon enough the banks woke up to the fact that they had lent out a lot of money that would not be repaid. These sub-prime loans had to be moved on, shifted off their balance sheets.
But who would touch this stuff if they knew the truth?
This is where the real criminality came in. The Wall Street Banksters in collusion with the ratings agencies schemed to bundle up some good debt with a heap of sub-prime debt, had it all declared AAA & flogged them off.
These Collateralised Debt Obligations (CDOs) were sold to Central Banks, Sovereign Funds, anyone who had a billion or two looking for the safest assets available. It was then sold off to major depositors, hence we see local councils around the world losing all their public funds. Not just towns are effected, whole countries will follow Iceland into financial destruction thanks to this obscenity.
America's allies have been betrayed, in fact everyone who America now desperately needs to buy their Treasury Bills find themselves owning this sub-prime debt with no re-dress.
It may have been a surmountable problem. Maybe. But we will never know because in his determination to be seen to be doing something, Hank Paulson, head of the US Treasury & one-time boss of Goldman Sachs made the gleeful decision to let Lehman Brothers collapse.
His happiness at triumphing over his arch-rival was short lived. By the next day, it had been pointed out to him that each of the big 8 Wall Street banks had effectively guaranteed each others debt & by cutting loose Lehman, he had in effect unravelled the safety network where each bank was locked into supporting every other.
The 700 billion bail-out package that was then forced through Congress at gunpoint is a drop in the bucket to what is now needed to save the system. Some 3 to 4 trillion have "leaked" into the major banks but another 50 trillion at least is needed to save them.
IT AINT GONNA HAPPEN!!!
By then, the US dollar will be worthless. Which ironically is the only way that the debt can be repaid. Hyperinflate the dollar a-la-Zimbabwe & the 50 or so trillion may be enough to do the weekly shopping.
We can give Alan and Bill O'Reilly to Oz for you and pacman. 
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