28 May 2013

global_wave

The 1930s depression happened because most Western governments indulged in gratuitous austerity. (The 1929 Wall Street crash was irrelevant.)

Governments were constrained by a gold standard, but they could have dumped the gold standard in the 1930s as easily as they dumped it in 1971 (led by the USA and West Germany). However, 1930s politicians clung to a gold standard for the same reason that today’s politicians cling to the euro: it provides an excuse to impose spending cuts and tax increases (i.e. austerity) on the masses, in order to widen the gap between rich and poor, and between the financial economy and the real economy.

Today we once again have a global wave of gratuitous austerity, which is designed, once again, to widen the gap between rich and poor.

Since there is no gold standard, most nations outside the euro-zone can create all the money they want. Therefore politicians falsely claim they must create less money (i.e. impose austerity) because their governments have a (non-existent) “debt crisis.” Politicians claim that austerity means expansion (that is, they say that the way to cure anemia is to drain the patient of blood.)

identical_merit

Politicians get away with this odious lie because most people not only believe it; they actually defend it. They enjoy it.

fun_lies

Today, a wave of gratuitous austerity is circling the globe exactly as it did in the 1930s. After decades in which living standards have been driven down by successive governments, and most manufacturing wiped out, the rich and their servants seek to shatter what remains of the post-World War II social gains of the working class, particularly public education, health services, and “safety nets.”

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noxius

New Zealand, for example, is Monetarily Sovereign, which means the NZ government can create all the money it needs, out of thin air. Thus, NZ has no need for austerity – but NZ politicians are imposing it anyway. Hence, during the last four years, New Zealand has been reduced from an island paradise to an economic wasteland, in which most people live from paycheck to paycheck (if they still have jobs). Meanwhile the rich have become richer than ever.

austerity_wave

New Zealand is controlled by the National Party, which corresponds to Republicans in the USA (or the Liberal Party in Australia). The opposition Labour Party corresponds to US Democrats. These are the two biggest parties in NZ.

New Zealand’s government has been imposing austerity for the last four years, thereby causing a plunging federal deficit. Finance Minister Bill English vows to increase his assault on social spending and living standards, and is threatening to have a surplus in 2014-15. Naturally Mr. English justifies his attack by (falsely) claiming that the NZ government has a “debt crisis.” A recent IMF report praised the NZ government’s austerity as achieving “the right balance between backing economic growth and limiting growth in public debt.”

On 16 May 2013 the ruling National Party submitted a proposed budget that increases austerity on the public. Prime Minister John Key’s government has already increased the Goods and Services Tax (GST), reduced the minimum wage for under-20-year-olds, and sacked over 5,000 public servants. It is also privatizing state-owned power companies.

Plans are in place to “save” $NZ 1.6 billion ($US1.4 billion) by 2016–17 by cutting welfare beneficiary numbers by 44,000—about 13 percent of the 339,000 people who currently rely on welfare payments.

Of course, the NZ government does not need to “save money,” since the NZ government can create as much money as it likes, debt free, out of thin air. However most people refuse to believe this fact. Most people prefer to rush to their doom.

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A fundamental overhaul of state housing is proposed, shifting funding to non-government social housing providers like the Salvation Army. State house tenants will have their tenancies reviewed—a step expected to see 3,000 tenants evicted by 2017. Private landlords will profit from renting rooms to those kicked out.

Student grants and loans will be cut by $29.6 million through further restrictions on eligibility. In the K-12 levels, $19 million has been earmarked to fund the first charter schools in 2014. Charter schools will be used to attack teachers’ conditions and employment rights.

Spending on military contractors will rise from $318 million to $583 million as the government moves to cement its expanding military ties with the US. This will help to keep money circulating in the economy, but military funding tends to become concentrated among the 1%.

To deal with the coming famine and riots (caused by austerity), New Zealand will enlarge its land combat forces, naval patrol forces, and fixed-wing transport forces.

As in all other nations whose governments are imposing austerity, all NZ politicians agree on the (false) need for austerity. The National Party, Labour Party, Green Party, New Zealand First Party, and the ACT Party (Association of Consumers and Taxpayers) all agree on the “need” to balance the federal budget, thereby causing a severe depression. They only disagree on which approach can most quickly bring about this nightmare.

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So if you have ever wondered why the world erupts into world wars, and why millions of people rush headlong to kill each other, you have your answer: most people are herd animals. Further theories and explanations are not necessary.

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By the way, I get almost no traffic on this blog. I could take steps to boost my traffic, but I won’t, since I would mainly get hate comments.

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Robert Oulds (above, at left) is a Conservative Party MP, and is also director of the Bruges Group, a right-wing propaganda mill “think tank” based in London. Mr. Oulds is a neo-liberal, but he does not want to see the U.K. become part of the euro-zone.

Recently the Iranian news channel Press TV interviewed Mr. Oulds regarding Portugal, and got some surprising honesty.

PRESS TV: The situation in Portugal is becoming more tense by the day. Just how long can it hold out?

OULDS: The situation is so severe that unemployment is now close to 17 percent. Alarmingly high. Last year the economy contracted by over 3 percent, and that contraction will continue while the euro is their currency, which doesn’t help their economy, it hinders economic growth, it makes things worse.

PRESS TV: How close are we to EU disintegration?

OULDS: Politicians are still wedded to the idea of the centralization of more power in the European Union – more powers being handed to the unelected and unaccountable institutions of the European Central Bank and the European Commission.

But the people are beginning to wake up to what is happening. They’re losing their jobs and houses, and there is less and less money in the economy.

This is showing to people the undemocratic nature of the European Union. The EU can’t help their lives, because the European Union is not accountable to them. It’s accountable to big business and big financial interests. That’s how the European Union works.

This will continue until the European Union is dismantled and power is returned to nation states. Then countries can reinvigorate themselves by spending money in the real economy and having their own currencies back, which can be devalued. Then the countries will not be dominated by Germany.

Until there is major change, there cannot be economic growth and so it will be forced eventually. The people will force change even if their political party is resisting it at the moment.

http://www.presstv.ir/detail/2013/05/27/305745/eu-pushing-portugal-into-economic-abyss/

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I agree with Mr. Oulds, except for one thing. He says Euro-zone nations should dump the euro currency, and recover their own currencies, so they can devalue their own currencies and become competitive again.

I say that’s not important. Whether to devalue a currency is a side matter; an incidental choice.

What’s important is that if euro-zone nations recover their own respective currencies, then their governments will be able to create as much money as they want, out of nothing, on their computer keyboards, simply by crediting accounts – just like nations outside the euro-zone do. They may still get austerity, just like U.S. politicians are imposing austerity, but at least they can vote local politicians out of office.

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debt-bomb

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2 Responses to 28 May 2013

  1. Jerry B says:

    Thanks for the great information, especially on “debt.” The other day Senator Rand Paul said, “We are borrowing $400,000 a second.We are borrowing $4 billion a day. We borrow from China just to run the ordinary functions of government.”(May 21, 2013). Sadly, more than half of the people in this state believe him.

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