The end is nigh…unless it’s not
The hysterical debt Armageddonists have been screaming about the need to adopt all sorts of insane austerity policies because if we don’t, China is going to invade and enslave our children…or something. This irrational frenzy is, of course, bipartisan. Both sides of the aisle, for example, recently voted against extending unemployment benefits.
Tea Party sweetheart, Sharron Angle, specifically said citizens are “spoiled” by jobless benefits, and the US should cut unemployment benefits in order to motivate people to find work. Because – as we all know – unemployed people are just too lazy to toil, and there are millions of jobs in some secret industry sector only teabaggers know about, waiting for capable employees to fill them.
No matter how loudly Krugman tries to tell these idiots that cuts are the very worst possible thing they could do right now — what does he know? He only won a Nobel Prize in economics — Republicans refuse to listen. Actually, the world doesn’t seem to be listening, either.
As Europe’s major economies focus on belt-tightening, they are following the path of Ireland. But the once thriving nation is struggling, with no sign of a rapid turnaround in sight.
Nearly two years ago, an economic collapse forced Ireland to cut public spending and raise taxes, the type of austerity measures that financial markets are now pressing on most advanced industrial nations.
“When our public finance situation blew wide open, the dominant consideration was ensuring that there was international investor confidence in Ireland so we could continue to borrow,” said Alan Barrett, chief economist at the Economic and Social Research Institute of Ireland. “A lot of the argument was, ‘Let’s get this over with quickly.’ ”
Rather than being rewarded for its actions, though, Ireland is being penalized. Its downturn has certainly been sharper than if the government had spent more to keep people working. Lacking stimulus money, the Irish economy shrank 7.1 percent last year and remains in recession.
But these are desperate times, and desperate times call for austerity measures, right? If the US doesn’t cut spending, awful things will happen. Fire will rain from the heavens! Cerberus will emerge from Hades to eat the weak!
Here’s a shocking chart from the Congressional Budget Office’s latest long term budget outlook showing that unless Congress acts decisively, our debt situation will be totally fine:
The (more or less) flat line is what happens under current law. O..kay. So why the big hurry to totally cripple welfare programs?
Well, for starters, the rich have always hated and resented these benefits, and during times of panic and crisis, they use the chaos as an opportunity to gut social programs. And the simple reason they do this is to make more money. If less tax dollars have to go toward feeding poor people, then they get to hoard more of their wealth.
It seems like a crazy level of nefarious viciousness, but that really is the short version of why they do it. Many delude themselves while doing this by saying out loud that rich people simply work harder, or unemployed people are too picky when looking for jobs, but that callous indifference is a thin shell resting atop a core of classist hostility.
[M]uch of the world’s elite understand exactly what they’re doing: i.e., use the economic catastrophe they themselves created as a pretext to kill the welfare state they’ve despised for 65 years. Nonetheless, a significant chunk of them actually believe they’re doing the right thing for everyone.
How is this possible? The best explanation I’ve seen appears in a 1994 book by John Ralston Saul called The Doubter’s Companion. It’s a kind of dictionary—the whole book is just him defining and discussing a bunch of words. And one thing he defines is “debt, unsustainable levels of.” Everything you need to understand about our current attempt to obliterate ourselves can be found within it. His most important point is that money is not real. Yet somehow we’ve decided it’s a great idea to stop feeding real food to real people and cease educating real children in order to demonstrate fealty to an abstract concept.
Read the full list, but here are a couple of highlights:
A nation cannot make debts sustainable by cutting costs. Cuts may produce marginal savings, but savings are not cash flow. This is another example of the alchemist’s temptation…
Civilizations which become obsessed by sustaining unsustainable debt-loads have forgotten the basic nature of money. Money is not real. It is a conscious agreement on measuring abstract value. Unhealthy societies often become mesmerized by money and treat it as if it were something concrete. The effect is to destroy the currency’s practical value.
Citizens have grown so accustomed to playing by the elite’s rules that it’s sometimes difficult to remember that rich people wrote the playbook, and rigged the rules in their favor so they always win, even if they’re the ones who wreck the economy. They get to play dangerous games with taxpayer money, and then when their mad little experiments blow up in their faces, they use taxpayer money to bail themselves out. Oh, and then they get fat bonuses. It’s a totally awesome system, as long as the poor people never realize they get screwed in the game.
These corporate welfare programs: corporate tax breaks, bailouts, the Bush tax cuts, etc. never face the chopping blocks during austerity talks, of course. The cuts only come from the bottom – from the poor and unemployed.
Americans have been awaiting the shiny new financial regulation bill to come out of Congress, and it seems some people were genuinely surprised when Democrats capitulated to Scott Brown, and dropped $19 billion in taxes from the banks.
But that makes perfect sense. Yes, the huge financial institutions have to make a few meager compromises because they brought the world to the brink of destruction, so they made concessions here and there. For example, most derivative trading now has to be publicly traded…except some of it that can still be dealt OTC, which is insane considering this toxic stuff sent the US spiraling into a depression, but again – the rich play by a separate set of rules.
For the most part, Wall Street has returned to business as usual, and the job market is flourishing once again for the banksters. Goldman Sachs just admitted to lying and now confesses it used its own money to bet against the US housing market, but no one seems to care. After all, politicians have food stamp programs to cut!
The wealthy are so rarely subjected to the rule of law that journalists (good journalists I might add – journalists I read all the time, and really like) seem amazed and genuinely pleased that watered down stuff like ratings agency reform, SEC and systemic risk regulation, survived at all. But no CEOs or hedge fund managers have gone to jail, and the system that brought the US economy to its knees is pretty much still in place.
Not only that, now that this crisis has happened, the austerity hawks are using the opportunity to gut the only thing that prevented a full-blown societal collapse — the welfare state. Look, you can keep knocking the little guy off his tightrope as long as there’s a net beneath him, but if you remove that net, it’s simply murder.
Subscribe to comments with RSS.