Alternatives to austerity

[CHIMO]

In the aftermath of the great recession, countries have been left with unprecedented peacetime deficits and increasing anxieties about their growing national debts. In many countries, this is leading to a new round of austerity – policies that will almost surely lead to weaker national and global economies and a marked slowdown in the pace of recovery. Those hoping for large deficit reductions will be sorely disappointed, as the economic slowdown will push down tax revenues and increase demands for unemployment insurance and other social benefits.

The attempt to restrain the growth of debt does serve to concentrate the mind – it forces countries to focus on priorities and assess values. The United States is unlikely in the short-term to embrace massive UK-style budget cuts. But the long-term prognosis – made especially dire by healthcare reform's inability to make much of a dent in rising medical costs – is sufficiently bleak that there is increasing bipartisan momentum to do something. President Barack Obama has appointed a bipartisan deficit-reduction commission, whose chairmen recently provided a glimpse of what their report might look like.

Technically, reducing a deficit is a straightforward matter: one must either cut expenditures or raise taxes. It is already clear, however, that the deficit-reduction agenda, at least in the US, goes further: it is an attempt to weaken social protections, reduce the progressivity of the tax system, and shrink the role and size of government – all while leaving established interests, such as the military-industrial complex, as little affected as possible.

In the US (and some other advanced industrial countries), any deficit-reduction agenda has to be set in the context of what happened over the last decade:

http://www.guardian.co.uk/commentisfree/cifamerica/2010/dec/06/us-deficit-cut-austerity-alternatives

[jtuck004]

1. Technically there is always a third option - To encourage growth.

Our creditors (the wealthy) would like us to believe that the only choices are "one must either cut expenditures or raise taxes".

Cutting expenditures throws away the lives of millions of people, judging their human capital, and
perhaps them, as worthless. Raising taxes adds to an already burdensome debt and may well remove enough
wealth from the economy to, once again, ruin the lives of many people.

China, on the other hand, is proposing to spend $1.5 trillion to boost their strategic industries.

We allowed our industrial base to be hollowed out for 40+ years, leaving us in a terribly weak position. People in
past and current administrations changed policies and laws which helped mortgage brokers, AIG, Citibank, Goldman
Sachs, Deutsche Bank, Moodys, and a host of other criminals to run perhaps the largest Ponzi scheme ever in this
country. Guarantees of over $20 trillion in loans have resulted in an outlay which still has over $2 trillion outstanding.
Those people should be in our jails.

And we are supposed to cut social security and medicare to our most vulnerable people so we can enrich those bastards?

How about we invest $4 trillion in our people and our country? Yes, the dollar might decrease in value - but it is highly
unlikely that the chicken-littles will get their wish of hyperinflation. It will make the wealth of those who are the
wealthiest in our country worth less. Darn that.

But it would rebuild our factories and strategic industries to a 22nd century level. It would offer the most vulnerable among
us a hand up, instead of the hand outs they are depending on today. It would improve our security, wildly increase the number
of jobs, begin to rebuild our nation.

Or we can take the low road by reducing the money we pay to help the most vulnerable survive, and cede our position in the world
to China and Brazil, nations who are beginning to understand that investing in your people and country is more important than
supporting the wealthy.