Elizabeth Warren warns of imminent economic apocalypse
Back in 2003, Elizabeth Warren predicted that subprime mortgages would cause an economic crash which, spoiler alert, actually did happen. Eleven years later, as Donald Trump bleats daily about the “GREATEST ECONOMY EVER,” the Democratic candidate has an equally chilling message that she hopes someone will actually listen to: another meltdown is just around the corner.
Instead of housing and mortgages, Warren pointed to leveraged corporate loans—lending to companies with high levels of debt—as a potential area of systemic risk. “These high-risk loans now make up a quarter of all American business loans, and they look a lot like the pre-2008 subprime mortgages: poorly underwritten loans with minimal protections that are then packaged and sold to investors,” she wrote. These loans have increased during the Trump administration as federal regulators have relaxed 2013 guidance that tightened lending standards.
Luckily, and unsurprisingly, Warren is armed not just with predictions of an economic armageddon but how to stop it. That plan includes reducing household debt, reducing leveraged corporate lending, strengthening manufacturing through investment, and limiting possible shocks to the economy by, for instance, not pushing for a no-Brexit deal or engaging in trade war by tweet. Of course, that plan is contingent on voters sending Trump back from whence he came in 2020, but you probably could have guessed that.
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