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With the victory of the Socialist candidate Francois Hollande over French President Nicholas Sarkozy, it signals the beginning of the end of right wing-imposed economic austerity programs around the world. Germany’s Angela Merkel, as head of the strongest economy in Europe, has been leading this austere assault on the not-so-strong economies of countries such as Greece, Italy, Spain, Portugal, and Ireland in return for loans with which to pay their bills.

http://www.thomhartmann.com/...

Problem is, the poor and middle class don’t like essential services getting cut, and certainly don’t like having to pay higher taxes to get their countries back in the black while those who caused the flow of all that red ink get tax breaks and bonuses while shoveling all their cash into hidden offshore tax havens.

Like all economic conservatives, Merkel and her ilk believe the only in austerity for the poor and not themselves. Someone name one government perk Merkel has eschewed as Chancellor of Germany. OK, time’s up and you couldn’t anyway. Same goes for every member of the legislative bodies throughout Europe and the United States. With them, it’s do as I say because I don’t have to.

Throughout economic history, austerity has never worked to balance budgets because, despite the lies told by those heads of state, and the Republican Party here, cutting spending to social programs never balances the budget—never.  Anyone who tries to balance their household checkbook knows that when expenses exceed income you must do two things: cut discretionary spending (spending on luxury and fun items), and bring in more money.

On a national level, the discretionary spending on fun and luxury items are the tax breaks for the rich and the corporations, subsidies on things like oil and corn, and defense. The savings from doing just those few things would not only balance the budget but to a long ways toward paying down the deficit.  In a time of depression, which the US is currently in, common sense and historical precedent shows you INCREASE spending on essentials like repairing infrastructure, job training and creation, and social services. You put spending money in the pockets of the poor—you don’t take it away. You spend money on preventive health care which is much cheaper than paying to treat illness. You spend money on regulatory agencies because it’s much cheaper to prevent a coal mine or an offshore oil rig from blowing up than it is to bury the dead and clean up the mess.

And the thing is, regular people don’t like to have to do without while the rich guys do as they please.  John Boehner, Eric Cantor, and Paul Ryan most likely dress in $2500 Armani business suits bought with taxpayer dollars, fly first class with airfare paid for with taxpayer dollars, and eat in the finest restaurants and stay in 5-star hotels, all paid for my taxpayer dollars; well, except for the times when lobbyists pick up the tab, so maybe not as many taxpayer dollars are being spent as we think.

Globally, people have had it with this austerity crap. They’ve rioted in Greece and London, and the Occupy movement has taken hold worldwide as well.  People are finally asking for their piece of the pie instead of looking through the window at the rich eating all of theirs.

The election of a Socialist leader in France might just presage the conservatives being tossed out every else where there are truly free elections. It could also happen here in the United States.

It’s the New World Order, all right.  It’s just not the new world the political conservatives had in mind.

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Comment Preferences

  •  You make the assumption that austerity (1+ / 0-)
    Recommended by:
    Wolf10

    ...is internally imposed. Nothing could be further from the truth. Outside forces are the imposers of austerity. You can see this clearly from higher orbit.

    Americans will discover that soon enough.


    Anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "my ignorance is just as good as your knowledge." ― Isaac Asimov

    by Pluto on Mon May 07, 2012 at 01:21:11 PM PDT

    •  By "outside forces" are you referring (1+ / 0-)
      Recommended by:
      wilderness voice

      to financial circumstances such as the demands of the rentier class and/or material limits on production?

      The frog jumped/ into the old pond/ plop! (Basho)

      by Wolf10 on Mon May 07, 2012 at 02:44:42 PM PDT

      [ Parent ]

      •  I refer to foreign investment inflows. (2+ / 0-)
        Recommended by:
        Wolf10, taonow

        At the moment, the US is buying its own Treasuries and pretending it is foreigners buying them. Essentially, we are monetizing the debt we need in real time:  40 cents for every dollar we spend.

        That means we are debasing the dollar -- so why would someone accept our shitty interest rates to buy Treasuries? We do not give them any confidence that we can roll the debt so that they can redeem. But even if we do, the dollars will be worth a great deal less than when they invested.

        The ratings agencies will then step into the loop and downgrade the debt, forcing the US to offer higher interest rates, that will essentially impose tremendous austerity on the people. What seems logical is to stop spending so much money. But the US is in a position where one in four people work for the defense industry indirectly. So, we can't stop spending there. Wealth equality is too great for the nation to have a consumer class, so revenues cannot be generated through this type of business. The only hope is to stop spending of keeping people alive.

        And this is all imposed from the outside, because other nations refuse to invest in us any longer.

        Meanwhile, the unregulated US banking cartel is holding outstanding derivatives valued at more (win or lose) than there is all the money in the world, many times over. I might add that most of those derivatives are re-insuring the holdings of the rest of the world's banks, making them whole again, should a global financial crises return this summer. And, leaving the US with nothing.


        Anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "my ignorance is just as good as your knowledge." ― Isaac Asimov

        by Pluto on Mon May 07, 2012 at 03:16:14 PM PDT

        [ Parent ]

        •  If the problem is systemic financial dysfunction, (2+ / 0-)
          Recommended by:
          wilderness voice, Pluto

          as opposed to material limitations imposed by nature or lack of labor capabilities, and I infer that from your comment, then governments have the power to reconfigure the financial markets.

          As powerful as banks and corporations are, governments still have a monopoly on money printing and the means of coercive force. Democracies also tend to enjoy a significant degree of popular support, which could make restructuring of of financial markets socially feasible. These markets have not always been as unrestrained as they are currently. They are now the tail wagging the socioeconomic dog.

          The frog jumped/ into the old pond/ plop! (Basho)

          by Wolf10 on Mon May 07, 2012 at 03:30:27 PM PDT

          [ Parent ]

          •  I think there's an argument (1+ / 0-)
            Recommended by:
            Wolf10

            ...to be made that the Federal government is largely privatized at this point.

            I don't think you can call it a democracy when the voters are mostly profoundly uninformed and unaware of the facts surrounding reality.


            Anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "my ignorance is just as good as your knowledge." ― Isaac Asimov

            by Pluto on Mon May 07, 2012 at 07:41:27 PM PDT

            [ Parent ]

  •  Austerity (1+ / 0-)
    Recommended by:
    Wolf10
    Throughout economic history, austerity has never worked to balance budgets because, despite the lies told by those heads of state, and the Republican Party here, cutting spending to social programs never balances the budget—never.
    Well ... Canada in the early 1990's had a huge deficit. The government brought in new taxes and cut spending (including social spending) and they were able to balance the budget and run surpluses for about 15 years straight (until the conservatives got back into power and started cutting taxes, but not spending, giving Canada deficits again). So yes you can cut social spending and balance the budget.

    Using the term austerity is confusing to many. It implies hardship, but that is what is required given the excesses of the last 30 years.

    BUT ... cuts should not be random. There are definitely things that need to be cut (start with defense) and others that need to be protected. But ultimately for cuts to work everyone has to feel some pain, there has to be a perceived shared sacrifice (the lesson from Canada).

    And some social programs do need to be looked at. The classic case in Greece is the island where 10% of the population managed to be classified as blind so they so they could get better social welfare (extreme maybe, but true http://www.independent.ie/...). Surely this kind of over spending has to stop.

    There is a similar situation in the US where http://www.zerohedge.com/...
     

    as David Rosenberg notes, the jobs number was about half of another far more important number - that of Americans applying for disability, which in April was +225,000. He continues: "this is the new stealth stimulus program - so far in 2011, nearly one million Americans have applied for disability and year-to-date, 333k have actually enrolled (covering 539k family members).
    Yes we have to start with corporate welfare, and defense and higher taxes on the rich (and that is where the bulk of the improvement has to come from). But surely you can't claim that there are no savings to be had in social programs.

    By the way, at current rates, the US budget deficit this year - 2012 (about 7-8% of GDP) is worse than Spain (about 5%), or France (about 5%), or Germany.

    Those who make peaceful revolution impossible will make violent revolution inevitable. - JFK

    by taonow on Mon May 07, 2012 at 01:33:11 PM PDT

  •  It's time for democracies to discipline markets (0+ / 0-)

    Absent a material cause, austerity driven by social relations gives cause to reexamine those relations.

    The frog jumped/ into the old pond/ plop! (Basho)

    by Wolf10 on Mon May 07, 2012 at 02:42:01 PM PDT

  •  It Will Be Interesting To See If... (0+ / 0-)

    Hollande can get his 75% marginal tax rate approved for incomes above 1 million Euros.

    While this may make really good sound bites to the masses, this would have really big unintended consequences.

    Just imagine if we had a marginal rate of 75% in this country.  Why would any professional athlete want to play in New York City?  For everything over $1 million the feds would take 75% and Nework Stte and NYC would take 11% for a total of 86% leaving the athlete only 14%.  And that is ignoring 6% for Social security and Medicare.  New York City wouldn't be able to get a top tier player to sign a contract.

    And this would effect any high paid employees, rock stars (concerts) broadcasters, all entertainers CEO's, etc.

    And it would affect any business that has high paid employees come to NYC as part of their business.  One of the reasons that the hated Rush Limbaugh moved to Florida is the taxes.  He still pays a few New York taxes if he comes back to NYC during a hurricane.  He calculates how many days he works in NYC and his total income is prorated.  So, a football player from Dallas that plays a game in NYC would only get to keep 14% of his income for the game in NYC.  People would be looking to go to low or no income states so that they could keep as much as possible.

    I don't think even Warren Buffet wants to give the feds 75% of his income each year.

    It will be interesting to see what happens.

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