The US has been engaged in an experiment for the past 20 years, and the experiment is about to wreck the US economy. The experiment was to allow corporations to loan lots of money to as many people as possible, regardless of their ability to pay back the loans. This caused the housing bubble, which has been the talk of the town for the past two years.
It also caused the credit card bubble, which is the topic of a big article in today's NYTimes: Given a Shovel, Americans Dig Deeper into Debt.
The article points out that part of the problem is that credit card companies can charge unjustly inflated amounts of interest for the payback, so that debtors are trapped.
Huge credit card debt, coupled by falling employment, falling housing prices and rising cost of living is heading this country straight for a massive wave of bankruptcies - in spite of the recent, harsher bankruptcy laws. And it's the fault of the credit card companies (and a compliant US government) who have made obscene profits in the past 10 years.
In the case of Frannie Mae and Freddie Mac, the US taxpayer will be expected to come up with the money for the bail-out. Once massive numbers of American taxpayers are bankrupt and unemployed, where will the tax money come from?
The US government will have to do two things to fix the coming world-wide economic crisis - create a jobs program, as it did during the Great Depression, and put a cap on the interest rates charged by credit card companies.
If they don't, a desperate US citizenry may just rise up and grab the massive profits of these corporations which were generated by this completely idiotic and heedless experiment of the past 20 years.