Joseph Stiglitz called austerity plans a "suicide pact."
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Posted 15 February 2013 - 09:29 AM
US can fix budget woes
By Ellen Brown
As the US Congress struggles through one budget crisis after another, it is becoming increasingly evident that austerity doesn't work. We cannot possibly pay off a US$16 trillion debt by tightening our belts, slashing public services, and raising taxes. Historically, when the deficit has been reduced, the money supply has been reduced along with it, throwing the economy into recession.
After a thorough analysis of statistics from dozens of countries forced to apply austerity plans by the World Bank and International Monertary Fund, former World Bank chief economist Joseph Stiglitz called austerity plans a "suicide pact."
Congress already has in its hands the power to solve the nation's budget challenges - today and permanently. But it has been artificially constrained from using that power by misguided economic dogma, dogma generated by the interests it serves.
We have bought into the idea that there is not enough money to feed and house our population, rebuild our roads and bridges, or fund our most important programs - that there is no alternative but to slash budgets and deficits if we are to survive.
We have a mountain of critical work to do, improving our schools, rebuilding our infrastructure, pursuing our research goals, and so forth. And with millions of unemployed and underemployed, the people are there to do it. What we don't have, we are told, is just the money to bring workers and resources together.
But we do have it. Or we could.
Money today is simply a legal agreement between parties. Nothing backs it but "the full faith and credit of the United States". The United States could issue its credit directly to fund its own budget, just as our forebears did in the American colonies and as Abraham Lincoln did in the Civil War.
Any serious discussion of this alternative has long been taboo among economists and politicians. But in a landmark speech on February 6, 2013, Adair Turner, chairman of Britain's Financial Services Authority, broke the taboo with a historic speech recommending that approach. According to a February 7 article in Reuters, Turner is one of the most influential financial policy makers in the world. His recommendation was supported by a 75-page paper explaining why handing out newly created money to citizens and governments could solve economic woes globally and would not lead to hyperinflation.
Posted 15 February 2013 - 09:56 AM
Finally an economist I can adore.
Sign me up for those handouts of newly created money.
Posted 15 February 2013 - 10:19 AM
I can hardly wait
Posted 15 February 2013 - 07:25 PM
They have been handing out newly created money for over 60 years without causing hyperinflation.
As long as you can supply the demand for resources...there is not any hyperinflation.
run out of food because you kill off all teh white farmers in Zimbabwe...and you will light the fuse.
like wages of unskilled labor...as long as unemployement is kept high...the employed can't demand higher wages...because you can just get rid of the disobediant ungrateful slaves that refuse to lick boots and replace them with obediant grateful boot licking slaves
It's what they do in China when a 1 Dollar an hour worker becomes exhausted...They are replaced with a fresh slave...
Just a nice slow hyperinflation to maximum potential...followed by collapse to oblivion.
Like the below chart...if that happened quicker...like in the space of a couple years...you all would have noticed it...but becuse the hyperinflation was gradual and not violent.
You all didn't notice it...and still don't...You all happy as pig in crap...until maximum potential is reached and it begins collapsing...then all the consumers increase their demand for commerical banks to create new money out of thin air and you all reflate out.
The creation of new money faster then the old money is destroyed by consumer demand for inflation powered the roaring 6 decades following WW2 that you all think is going to last forever but is just the greatest temporary prosperity or "boom" in the 600 year history of the commecial banking credit system
Until you reach the maximum potential to demand more new money to be created out of thin air faster than it's returning back into thin air from the commercial banking system...then it's game over.
This happend in 2008.
But the Government and central banks can force you all to sign on the dotted line by doing it for you all...and create more new money of course for a limited amount of time.
In order to sustain price inflation you have to cut or increase the supply of resources that power the glorious march to doom with glee by all the oblivious absolute capitalist drones that slave day in and day out to supply the power that draws the lines on the chart
At some point to cut supply to sustain the economy...You will have to manipulate north Korea into destroying South Korea to reduce the supply in relation to demand to sustain prices to avoid deflation of the inflation.
Of course at the bottom...Is where you cover your shorts...by employing the survivors to reflate back up out of the deflation...and you live off the yield of them.
That is how economics that is not taught in peasant University works.
All the economic zones lower in the hierarchy like Iran, Greece, Ireland, Iceland, South America and Syria..etc are being cut off from the supply of inflation to collapse and loot them (absolutely capitalized upon) to sustain the economic zones at the top of the hierarchy...So that you two can log on and pretend you have a clue about economics by reposting lies that were constructed by people that have more talent/education than you at telling lies but which are compatible with the lies you want to believe are Truth.
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