BY FIKRET BILA
MILLIYET- The US is preparing for passing a huge `rescue operation' at its Congress against the economic crisis it suffers. If the Congress passes the rescue budget totaling $700 billion, the US would perform the greatest nationalization projects of the world, huge finance institutions would takeover the banks and rehabilitate and sell them to their old or new owners. Thus it would be saving the system. The price of this operation will be paid by the middle-class Americans, just like in Turkey and an additional burden of $2,000 will be placed on each tax payer. When the financial crisis starts to be reflected on the real economy, the US economy will tend to shrink and the number of the unemployed will increase, which will be another dimension of this price to be paid by the people. So the incidents in the US look like those experienced in Turkey, that is, leaving the banks to the state, transferring the banks and newspapers under the Saving Deposit Insurance Fund's (TMSF) management, the disappearance of billions of American dollars, making the people pay the price for this, etc. So the essence and the state's function don't change.
How was the US dragged to this crisis? Bilkent University's lecturer Professor Erinc Yeldan who has lived in the US for some period of time to go back to Turkey replied my question briefly as follows:
1. The US has already had the public deficit and the cost of the war in Afghanistan and Iraq is also another important factor.
2. The US finance system took excessive risks and got into excessive debt in 2003 - 2006.
3. There was no real increase in the middle-class Americans' salaries in this period, but the consumption was motivated. Banks and finance institutions continued to offer risky credits, just like in the mortgage system. This situation has been continuing for 15-20 years. But then an average American started to face difficulties about repaying these credits. Thus the banks' balance sheets started to deteriorate and credits were recalled. This situation forced the system more and the middle-class started to suffer greater problems. The rate of bankruptcies increased and the investment banks collapsed, when repayments had ceased.
4- The US started to make cheap import from China and Japan, got into excessive debt and started to be unable to carry this burden.
Mr. Yeldan estimates that this crisis will have an impact mostly on the US economy and all the other economies depending on this system and cause a shrink and recession. He thinks that the crisis will probably influence Turkey as well. He doesn't expect a crisis like the one we suffered in 2000-2001, but believes that it will cause negative impacts. He argues that this year a great growth shouldn't be expected, which is also shown by indicators. For him, the crisis in the US might create difficulties about import and thus the export might shrink and a recession might occur in the real economy.