- Instead of vitally needed stimulus, Washington and European
governments dictate austerity. The pretext of deficit reduction is being
used to transfer more wealth to those already with too much, plus the usual
canard over the urgency to save national banking systems.
- In other words, make ordinary people bear the burden
of bailing out banking giants responsible for the severest economic crisis
since the Great Depression. How? The usual IMF solution, involving preservation
of capital at the expense of workers - a package including wage and benefit
cuts, less social spending, privatization of state resources, mass layoffs,
deregulation, lower "onerous" taxes, maintaining corporate debt
service, and harsh crackdowns against resisters.
- In the 1980s, it was called Reaganomics, trickle down,
and Thatcherism. Today it's destructive "shock therapy" called
austerity, the same scheme pitting capital against people - disposable
workers tossed out for big money's gain.
- It's how predatory capitalism works, destructively for
so many to enrich an elite few - snake oil peddled as an economic elixir,
corrupted politicians and central bankers forcing harmful policies that,
in fact, don't work.
- Three years of failure showed imposed measures have hurt,
not helped, and the longer they continue, the more sickness will spread
and deepen, causing imposed poverty. It's why independent experts see long-term
depression, rising unemployment, human deprivation, and bigger than ever
bonuses for bankers until the inevitable house of cards collapses. Welcome
to the new world order, phase two.
- In America, the Fed furiously monitized debt. First QE
I, now II, likely III and IV coming that could have worked the first time
if constructively, not destructively used. An earlier article explained,
accessed through the following link:
- Swapping credit for toxic assets helps banks, not the
economy. However, using it for productive investment works. In her September
8 Webofdebt.com article titled, "How to Reverse A Deflation: Helicopter
Ben Needs to Drop Some Money on Main Street," Ellen Brown explained
- "Running the government's printing presses to pay
its bills has not seriously been tried since the Civil War, when President
Lincoln saved the North from a crippling war debt at usurious interest
rates by printing greenbacks (US notes, interest free). Other countries,
however, have tested and proven this model more recently. They include
Germany, which pulled itself out of a massive financial collapse in the
early 1930s by printing a form of currency called "MEFO bills,"
and Australia, New Zealand and Canada, all of which successfully funded
public works in the first half of the 20th century simply by advancing
the credit of the nation. China, Malaysia, Guernsey, Jersey, India, Argentina,
and other countries" also tried it successfully during hard times
to revive their economies.
- Why not ailing America and European ones today. Central
bank money creation (credit) for public projects and other productive investments
stimulates economic growth, creates jobs, and turns depression into prosperity
- inflation free by keeping credit and productive investment in balance.
Whenever and wherever it's been tried, it worked when done right.
- Instead, sweeping austerity measures are dictated for
America and Europe. Last spring, an EU summit announced a Greece bailout
package, dependent on "budgetary discipline" and imposed poverty,
the same IMF prescription for Latvia, Iceland, Hungary, Romania, and Ukraine.
Now eurozone shock therapy, what economist Michael Hudson calls a:
- "neoliberal experiment....to drastically change
the laws and structure of how European society will function for the next
generation. If (successful, they'll) break up Europe, destroy the internal
market, and render that continent a backwater."
- Calling it a "financial coup d'etat," he said
"bankers are demanding (and getting governments to) rebuild their
loan reserves at labor's expense," Washington using the same ugly
- Throughout the West, neoliberals are empowered. "From
Brussels to Latvia, (they) aim to shrink their economies (by) roll(ing)
back wage levels by 30 percent or more - depression-style levels,"
making Europe and America banana republics.
- In late September, EU countries, led by Germany, increased
pressure on member states to cut deficits by lower public spending, Chancellor
Angela Merkel, in fact, demanding sanctions on offenders and suspending
their voting rights for continued policy breaches. At the same time, corporate
taxes have been cut, continuing a burden shift to workers. Since 2000,
12 of the 27 EU countries raised VAT rates, Hungary, Denmark and Sweden
now charging 25% for commodity purchases while wages and benefits are being
slashed. Some new world.
- Across the continent, painful worker hammering continues,
Ireland the latest troubled country making headlines. On November 13, Wall
Street Journal writers Neil Shah and Marcus Walker wrote: "Ireland
Stirs Specter of EU Default," saying:
- "Europe's debt crisis is still smoldering (months)
after relative calm," showing it deceptively hid big trouble, awaiting
its moment to surface. The challenges facing Ireland "show few signs
of abating soon," a worrisome contagion affecting Europe's largest
economies, leading analysts to wonder what shoe will drop next.
- Workers, of course, are most affected, spending cuts
and high unemployment taking a punishing toll. More are coming, assuring
greater deprivation and added impetus for increased emigration. Monthly,
1,250 students leave Ireland as well as thousands of young workers, seeing
no future at home. Those remaining face growing burdens, including homeowners
to avoid forclosure. One in eight mortgages is underwater. The worst is
yet to come, and similar trouble affects Greece, Italy, Spain, Portugal,
Britain, and elsewhere across the continent, yet policy fixes assure worse
ahead, not better.
- Also in America, planned austerity the wrong solution
for a sick economy, yet bipartisan support and two deficit cutting commissions
back it. An earlier article explained, accessed through the following link:
- It covered Obama's proposed social spending cuts, while
leaving defense, banker bailouts, and other corporate subsidies intact,
a prescription from hell promising harder than ever hard times for millions.
On November 10, Obama's deficit cutting commission outlined its plan. The
above link discussed it, a thinly veiled scheme to serve capital, not people
when they most need it.
- The Bipartisan Policy Center (BPC) was also mentioned,
a lesser known group for the same purpose, its proposal imminent at the
time. Now it's out with draconian measures as destructive as Obama's commission
- proposing Social Security, Medicare, Medicaid, and other social benefit
cuts, harming working households most, the way elitists always cheat ordinary
people for themselves.
- Co-chaired by former Senator Pete Domenici and Alice
Rivlin, former director of the Office of Management and Budget and the
Congressional Budget Office, it's called "Restoring America's Future,"
- America "fac(es) two huge challenges that can only
be surmounted" by bipartisan support "to curb the mounting debt
(to) reinforce recovery, not impede it."
- Typical elitist boilerplate, then proposing punishing
measures on working households for greater enrichment for themselves. They
- -- indexing Social Security benefits to life expectancy
to reduce benefits as longevity increases; in other words, "incentiviz(ing)
people to work longer to compensate for lower benefits;
- -- eliminating annual cost of living adjustments (COLAs),
justified by claiming inflation is overstated when, in fact, it's higher,
especially for retirees facing costly medical expenses;
- -- over the next 38 years, "rais(ing) the amount
of wages subject to payroll taxes (now capped at $106,800) to cover 90%
of all wages" - suggesting bonuses, capital gains, dividends, and
other executive compensation be exempt, for many, the lion's share of their
- -- instituting a one-year payroll tax holiday for workers
and employers, Social Security to get no funding for 12 months to save
an estimated $650 billion; supposedly, future general revenue will replenish
- -- cutting Medicare benefits, including by higher Part
B premiums (from 25 to 35% of total program costs), co-pays, and fees for
outpatients services; also establishing privately owned, lower-cost, health
insurance exchanges to be given competitive cost advantages over Medicare
- a de facto Trojan horse to replace it eventually, leaving recipients
at the mercy of predatory insurers that profit by denying expensive care;
- -- by 2018, cutting Medicaid by the amount it grows faster
than GDP, providing less care to the indigent, perhaps eventually none;
- -- shielding insurers and drug giants from malpractice
lawsuits by making it harder to file them; then capping non-economic and
punitive damage awards, suits to be adjudicated in "specialized malpractice
courts," that may, in fact, be civilian equivalents of military commissions,
used to deny so-called "terrorists" due process and judicial
- -- instituting a 6.5% national sales tax (called a Debt
Reduction Sales Tax - DRST); like European VATs (value added taxes), they'll
hit ordinary people hardest and can be incrementally raised anytime to
- -- simplifying the tax code to two brackets (15 and 27%),
favoring the rich; regressively cutting the top personal and corporate
tax rate from 35% to 27%, claiming it "will make the tax system more
- -- eliminating home mortgage and most other deductions
- -- taxing employer provided health insurance to encourage
less comprehensive coverage and make healthcare cost more;
- -- freezing non-defense discretionary spending for four
years, then capping it according to GDP growth - a prescription to slash
social benefits, perhaps eliminating them later;
- -- freezing "discretionary" defense spending
for five years, then capping it with GDP growth; doing it, among other
ways, by "reforming military health care;" in other words, cutting
veterans' (and perhaps active duty forces') health benefits; and
- -- various other schemes hitting working households hardest.
- BPC said "19 Americans (elitist ones) from across
the country, with diverse backgrounds and views, examined a broad range
of spending and revenue options for the federal government....We believe
(their plan) provides a comprehensive, viable path to restore our economy
and build a strong America for future generations and for those around
the world who look to the United States for leadership and hope."
- More boilerplate, disguising a scheme to enrich the few
while denying equal opportunity to growing millions, especially the poor,
disadvantaged, needy dependents, disabled and retirees, leaving them more
than ever on their own and out of luck, the "future America"
none of them want or deserve.
- Stephen Lendman lives in Chicago and can be reached firstname.lastname@example.org.
Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge
discussions with distinguished guests on the Progressive Radio News Hour
on the Progressive Radio Network Thursdays at 10AM US Central time and
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