One of the core purpose behind the creation of digital currency like Bitcoin was ownership – letting people have control over their hard-earned cash. The current situation, as it stands, can’t be any more terrible. Financial institutions utilize people’s capital in whatever ways they want and if their greed collapses the economy, governments uses taxpayers’ money to bail them out. It can’t get more ironic than this. That’s exactly what happened in last American recession in 2008 where banking sector was bailed out by Bush administration.
During 2007’s subprime mortgage economic collapse, an overwhelming majority of American banks were on the verge of bankruptcy by the beginning of the next year. To save them from the fallout of sheer greediness, Bush administration granted them cash and no strings attached loans out of taxpayers’ money. $800 billion were just handed over to the financial institutions while loans of whopping $2.2 trillion were granted as well. That’s what triggered the Occupy Wall Street movement.
It’s not just America though, governments all around the globe have been exercising their authority to rescue reckless financial institutions for years. And whenever there is a economic crisis, financial institutions cry for help to authorities. This is something that’s somewhat acceptable if the company on the receiving end belongs to a manufacturing industry since it saves working class jobs but financial institution bailouts are almost always about saving people with deep pockets.
Expert economists believe that bailing out banks sets an unhealthy precedent for wealthy bankers as they’re encouraged to take higher risks to maximize their profitability while putting huge amount of public capital at risk. Since they know that in the event of heavy loss, it would be covered by taxpayers’ money as majority of banks are well-connected with top politicians.
Another idea that is even worse have been floating around recently. It’s known as bail in and the concept is that in case of a financial institution becoming solvent, it’s not the taxpayers but the depositors who will absorb the losses which is akin to confiscation of privately owned wealth. The first bail in attempt was witnessed in Cyprus in 2013.
With all these tactics being put into action by bankers and financial institutions with governments behind their back, it’s almost impossible to stop them from playing cut and loose with people’s hard-earned wealth. The only solution is to build a parallel economic system where each and every individual is in full control of their wealth and not the banker or a government official.