The FT headline (in an email) Martin's Wolf's article today using these words:
These are dangerous times. The US and eurozone may be on the verge of making among the biggest financial mistakes in world history, writes Martin Wolf.
He's right. As the New York Times reports:
From the White House and Congress to financial centers, pessimism spread on Tuesday about the prospects of a debt-limit deal between President Obama and Republicans, prompting the Senate Republican leader to propose a “last-choice option” that piqued the administration's interest but angered conservatives in his own party.
The leader, Senator Mitch McConnell of Kentucky, said a bipartisan budget-cutting deal is probably out of reach, making it unlikely that Republicans would approve an increase in the government's debt limit by Aug. 2.
The result of that failure would be that the US would default on its debt - the biggest in the world. There would also be a massive internal economic crisis. Old age pensioners would not, for example, get their pensions.
And what's the argument about? Well, how to deal with the deficit (if that it it needs to be tackled). The Republicans are refusing point blank to consider the possibility that a shortfall in income should be made good by more taxes.
Then consider what Wolf has to say on this (apologies to FT for a long quote, but this is extremely serious stuff):
The astonishing feature of the federal fiscal position is that revenues are forecast to be a mere 14.4 per cent of GDP in 2011, far below their postwar average of close to 18 per cent. Individual income tax is forecast to be a mere 6.3 per cent of GDP in 2011. This non-American cannot understand what the fuss is about: in 1988, at the end of Ronald Reagan's term, receipts were 18.2 per cent of GDP. Tax revenue has to rise substantially if the deficit is to close.
It is not that tackling the US fiscal position is urgent. At a time of private sector deleveraging, it is helpful. The US is able to borrow on easy terms, with yields on 10-year bonds close to 3 per cent, as the few non-hysterics predicted. The fiscal challenge is long term, not immediate. A decision not to allow the government to borrow to finance the programmes Congress has already mandated would be insane. As the fiscal expert, Bruce Bartlett, has argued, the law requiring Congressional approval of extra debt might even be unconstitutional.
Yet, astonishingly, many of the Republicans opposed to raising the US debt ceiling do not merely wish to curb federal spending: they enthusiastically desire a default. Either they have no idea how profound would be the shock to their country's economy and society of a repudiation of debt legally contracted by their state, or they fall into the category of utopian revolutionaries, heedless of all consequences.
In other words, first of all there's no crisis. But then noting the crisis has been precipitated by a demand for lower tax he notes there is simply no tax crisis either: taxes are at a low point and yet still the Republicans demand no more taxes.
The largest state on earth is being pushed towards economic melt down by fanatics: fanatics who will preserve the right of the rich to keep their income and make the rest suffer come what may.
Make no mistake that they are serious.
Make no mistake that they are fanatics as well.
Make no mistake that they are indifferent to the outcome: they don't care about the suffering this will cause. They are ideologues devoid of empathy, driven by greed, motivated by hatred for those poorer than themselves and so contemptuous of government they will destroy their state rather than pay for it.
This is extremely dangerous indeed. This is not just economic meltdown we're facing: this is a crisis for the world of epic proportions. This is a crisis for sanity, for decency, for morality, for ethics, for the poor, for democracy, for stability, for the hopes and aspirations of billions - all of them to be sacrificed for the madness of the far right. The likes of Murdoch who has of course done much to promote this madness.
We're entering a very dangerous period. Make no mistake about it.
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This could be the ultimate meltdown of the pyramid system imposed by the international bankers in 1913. The alternative is to keep on playing the game and disregard the debt, which, after all, is only numbers on a computer screen.
The time has come for the universal basic income. There simply is no other option
http://www.facebook.com/pages/1000000-people-demand-the-unconditional-universal-basic-income/153633841358545#
Local currencies need to develop to make available money where it’s needed irrespective of how little national currency is in circulation. That way the Fed. America, the BofE, the whole damn bankster gang can go do what they want to, we’ll all still be ok. We can survive anything they throw at us if we properly understand it and know how to counteract it. The true danger to the banksters of supplementary currencies of the kind I’m suggesting may be measured by the speed with which they’re outlawed when they threaten to become popular. Worgl provides a handy reference point here. Several others are referenced in Michael Rowbotham’s Grip of Death, which as you might guess I’m re-reading. Thomas H Greco Jr provides much in the way of inspiration here http://www.reinventingmoney.com/ and should be studied by all.
Really all the banksters are threatening with us with is their eternal cry of “It’ll be the worse for you!” In other words, if we don’t give them increasing amounts of the money in circulation, it’ll be the worse for us. In fact, it’ll be the worse for us if we DO keep giving them money. The more we give, the more they demand. Let’s give them the finger instead but we do need to be prepared first.
BB
All sovereign states have the capability of creating their own debt-free currency. We could fund all our public services without it costing us a single penny. If the government decides to loan this money to strategic industries at very low interest rates, the money and interest that flows back could be used to off-set taxation such as income tax. Any real threat of inflation and the surplus money can simply be taxed out of circulation.
There is no good reason for us to keep funding bank profits at interest simply to provide our medium of exchange, Coins and notes are supplied free of debt – there is no good reason whatsoever that number money cannot be supplied by the state as well.
As I understand it, as we’re in the EU we can’t do that. This tells us volumes about the real intentions of the EU and gives clear indication we should never have been in it.
BB
The EU is just another tier of management set up to fulfil the requirements of the international bankers via a cloak of subterfuge.
Well, EU rules state that a member government cannot DIRECTLY finance itself by monetisation, but there are ways around that.
But as I have said before, if we were to pursue government created debt-free money, I really can’t see what the EU could conceivably do about it.
Regarding the debacle over the Bombardier rail contract having to go to Seimens due to EU competition rules, we seem to be one of the few that actually take a blind bit of notice of these rules. Germany and France in particular, cheerfully ignore them. It is reckoned that 100% of German trains are built in Germany.
We are probably in a stronger position than either Germany and France because we are a sovereign nation with our own currency/ I honestly cannot see what the EU could really so about it if we chose this path, to be honest!
We shall soon see how the committee reviewing banking responds to the recommendations which will be submitted by Positive Money.
I don’t see what it could do either. The EU seems to me to be, as well as a front for bankers as suggested above, a front for our elected politicians to hide behind while they enrich themselves by selling us out to the highest bidders. I suspect there’s a sign up somewhere saying “Britain for sale; assets stripped here” and it’s our own politicians that are doing the selling. We’re far too obedient in this country. I blame our schooling myself. The famed British reserve, the stiff upper lip, that’s all just a consequence of social conditioning. It’s why we get screwed here more than they do in other countries.
BB