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News ::
A form of looting (english)
04 Sep 2003
Modified: 05:46:24 PM
IMF lectures Washington
The United States was chastised recently by the International Monetary Fund (IMF) for its reckless tax-cutting program which has contributed greatly to the increased the size of the federal deficit.

The IMF expects the US budget deficit to exceed $550 billion over the coming years, a staggering 5 percent of America's yearly economic output.

According to Kenneth Rogoff, IMF economic counselor, the United States is on the "biggest external borrowing rampage in the history of the world with current account deficits projected at 5 percent for as far as the eye can see."

With the USA sucking up cash from domestic and world markets and savings accounts to feed its perpetual war programs, little room remains for private investors to borrow at reasonable interest rates. Productivity is set to decline since American businesses have fired all the employees they can and, subsequently, have outsourced millions of jobs to foreign countries. To alleviate the coming disaster, the IMF recommends that the US reenact the Budget Enforcement Act which would bring back some sort of fiscal reality to the regime in Washington.

http://onlinejournal.com/Commentary/090403Stanton/090403stanton.html




and here the IMF was so angered at third world countries for racking up a few hundred million or a billion or two in debt

the following story got lost, having been released during the invasion of Iraq


War Eclipses Crucial IMF Report
http://allafrica.com/stories/200303240605.html

Some quotes from the article on AllAfrica.com

For the first time the IMF has admitted that forcing developing countries to open their markets to foreign investors could increase the risk of financial crises. That has been said before - but not by IMF - and that is not a sweet story given the way we rush to the IMF to get economic prescriptions. The report says that in some cases the process of liberalisation - which it imposed on us - has been accompanied "by increased vulnerability to crises", an issue when raised previously by advocacy groups was dismissed with a wave of the hand. And to twist the knife, the IMF report says there is "little evidence" that its policies on liberalisation encourage economic growth in poor countries. But the major question is: were we deceived into liberalisation programmes and where do we go from here? The damage, for us, is already done and the warnings are coming too late.... countries are advised to achieve an economic balance by creating strong domestic financial institutions. Now how do we create such strong institutions when they have all collapsed as a result of opening our markets? The privatisation schemes that were advocated by IMF stifled economic democracy and people had little voice in determining how national assets were valued and handled. These policies exposed people to risk and the most vulnerable people were left with no access to basics like water, food, and health care. Subsidy programmes for impoverished people were eliminated, and basics became unaffordable. But what do we get, after all that? The same IMF now turns again to tell us that it has learned that that policy could have been wrong in the first place. It is time to understand that the so-called integration into the global economy is a hoax ... agricultural production (for food and other domestic needs) is in crisis; public services have been severely weakened But once the focus shifts from Iraqi war, we still have a bone to pick with IMF. We sure will.




"A form of looting"

A short-term tax benefit for the poor would actually be a reasonable stimulus. Then, the money would almost certainly be spent ... this deficit continues far into the future, as the bulk of the tax cuts can be expected to continue indefinitely. The Administration is giving us red ink as far as the eye can see, and these permanent aspects outweigh the short-term stimulatory effects ... The rich don't need the money and are a lot less likely to spend it - they will primarily increase their savings. Remember that wealthier families have done extremely well in the US in the past twenty years, whereas poorer ones have done quite badly. So the redistributive effects of this administration's tax policy are going in the exactly wrong direction ... with the current tax cuts, a realistic estimate would be a deficit in excess of six trillion ... The government is not really telling the truth to the American people. Past administrations from the time of Alexander Hamilton have on the average run responsible budgetary policies. What we have here is a form of looting ... We can be like a very poor country with problems of threatening bankruptcy. Or we're going to have to cut back seriously on Medicare and Social Security. So the money that is going overwhelmingly to the wealthy is going to be paid by cutting services for the elderly. And people depend on those ... Bush's father committed a great act of courage by actually raising taxes. He wasn't always courageous, but this was his best public service. It was the first step to getting the deficit under control during the Clinton years ... I think this is the worst government the US has ever had in its more than 200 years of history. It has engaged in extraordinarily irresponsible policies not only in foreign and economic but also in social and environmental policy. This is not normal government policy. Now is the time for people to engage in civil disobedience.

George A. Akerlof, co-winner of the 2001 Nobel Prize in economics
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Comments

state of the union (english)
04 Sep 2003
Some artists redid Bush's state of the union Address - good job - wonder how they did it...

real player
http://fuckitall.com/bsh/union.ram

windows media file
http://fuckitall.com/bsh/union.wmv

Quote of the day...
"This happens to be an unusually corrupt administration, kind of like an Enron administration, so there's a tremendous amount of profit going into the hands of an unusually corrupt group of gangsters. You can't really have all this stuff on the front pages, so you have to push it off the front pages. You have to keep people from thinking about it. And there's only one way that anybody ever figured out to frighten people and they're good at it." ---Noam Chomsky
coughing up for a good cause (english)
04 Sep 2003
the debt built up over the past two decades by the world's most heavily indebted poor countries is 250 billion dollars. And this debt was piled up after those same countries were encouraged to go into pawn during the eighties to 'build up their economies' by international organizations. Didn't work worth a damn, and they have spent the last couple of decades getting 'liberalized' and everything else you can think of, while getting diddly squat to sell low priced commodities and sweat shop labor, and sinking ever deeper into debt...

the cost of Bush's Iraq war ... 70 billion and now he is asking for a further 80 billion for a temporary total of 150 billion, and that is on top of the 500 billion a year in debt Americans are borrowing to give tax cuts to his rich friends

and that jubilee 2000 debt reduction campaign went right down the sewer...but then its funny how people can always come up with a vast fortune when they need one, if its for a good cause...
the great depression (english)
04 Sep 2003
and work hard and study hard and perhaps you might even win a nobel prize for economics

pieces like this generate some remarkable pro-bush comments, so I thought I would mention that when you cut taxes by hundreds of millions of dollars, you get hundreds of millions of dollars less in revenue, which equals deficit .. and yes, it is 2003 now and the tax cuts have been in effect for a while now ... everyone agrees that the massive debt is directly related to these tax cuts since it is simple mathematics to figure this out, and look, when even the IMF is freaking that is a pretty bad sign ...
this policy was tried under the Reagan Administration, and they gave that thing a name = they called it supply side economics
the end result was that during that one Republican adminstration the United States went from the world's largest creditor nation to the world's largest debtor nation and racked up a deficit so large that no one even thinks about paying it back, they just pay the interest on that thing and consider themselves lucky to have managed that much

as for the so called 'stimulus effect' if they wanted a stimulus then perhaps they could have given the money to poor people, who would have spent it, or they could tried some of that classic Keynesian economics, which involves gov't spending programs which has a proven history - after all, there hasn't been a great depression since that Keynesian economics was begun by Roosevelt, only recessions, which are bad enough, but at least they aren't depressions ... this novel 'give money to rich people' approach which is known as 'supply side economics' didn't work under Reagan, and the so called Reagan miracle was the result of deregulation and the temporary profits that came in from exporting jobs to sweat shops (its called 'Free Trade' but a better word would be 'Slave Trade' since that is how it worked out in actual practice) and the end result of that supply side policy was the erosion of the base of the economy, by eroding jobs, and in the end all everyone wound up with was a giant bubble...as for the Clinton years, you might remember that those were Republican years as well, since they controlled the house...as for the economy heading down the crapper, that goes back to Reagan and it was a long time coming but it was inevitable that it came...during the 90s right wing commentators on television were always nervously talking about 'the new economy' and then it was 'the service economy' - the reason why we needed a 'new economy' was because of the destruction of the manufacturing base and the export of jobs to cheap sweat shops, which eroded the base of the economy, and then corporations had to do things like cook the books the make it seem like, yes, they were still making money...it was a giant bubble, and it still is...you know according to Warren Buffet, the stock market if it was to be at its historic value levels should be somewhere around 5000, so we still have this giant speculative bubble to this very day, with the DOW at around 9500

This is serious business, and the typical 'our leaders are always right' business could wind up doing a lot of people a hell of a lot of harm, and they have already been harmed enough as it is, since the wealth of the country has been looted since Reagan times, and as the Nobel economist quoted in the article, the people at the base of the economy have been doing very bad in the process...these right wing policies are harmful to ordinary people, and in the end, real harmful to rich people too, once the economy goes down the tank, but at least they have a large safety cushion to ride out any subsequent depression

Albert Einstein described the process of creating a depression as follows...

Albert Einstein - Why socialism : a few quotes from Einstein's essay - "I shall call "workers" all those who do not share in the ownership of the means of production ... the worker produces new goods which become the property of the capitalist ... Private capital tends to become concentrated in few hands ... The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists ... an "army of unemployed" almost always exists. The worker is constantly in fear of losing his job ... unemployed and poorly paid workers do not provide a profitable market ... The profit motive, in conjunction with competition among capitalists, is responsible for an instability in the accumulation and utilization of capital which leads to increasingly severe depressions ... This crippling of individuals I consider the worst evil of capitalism. Our whole educational system suffers from this evil. An exaggerated competitive attitude is inculcated into the student, who is trained to worship acquisitive success as a preparation for his future career ... "



The Cause of the Great Depression

The depression began in late 1929 and lasted for about a decade. Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920's, and the extensive stock market speculation that took place during the latter part that same decade. The maldistribution of wealth in the 1920's existed on many levels. Money was distributed disparately between the rich and the middle-class, between industry and agriculture within the United States, and between the U.S. and Europe. This imbalance of wealth created an unstable economy. The excessive speculation in the late 1920's kept the stock market artificially high, but eventually lead to large market crashes. These market crashes, combined with the maldistribution of wealth, caused the American economy to capsize ... the rewards of the "Coolidge Prosperity" of the 1920's were not shared evenly among all Americans. According to a study done by the Brookings Institute, in 1929 the top 0.1% of Americans had a combined income equal to the bottom 42%. That same top 0.1% of Americans in 1929 controlled 34% of all savings, while 80% of Americans had no savings at all...In the 1923 case Adkins v. Children's Hospital, the Supreme Court ruled minimum-wage legislation unconstitutional ...

Essentially what happened in the 1920's was that there was an oversupply of goods. It was not that the surplus products of industrialized society were not wanted, but rather that those whose needs were not satiated could not afford more, whereas the wealthy were satiated by spending only a small portion of their income. A 1932 article in Current History articulates the problems of this maldistribution of wealth ... One obvious solution to the problem of the vast majority of the population not having enough money to satisfy all their needs was to let those who wanted goods buy products on credit. The concept of buying now and paying later caught on quickly. By the end of the 1920's 60% of cars and 80% of radios were bought on installment credit. Between 1925 and 1929 the total amount of outstanding installment credit more than doubled from $1.38 billion to around $3 billion. Installment credit allowed one to "telescope the future into the present", as the President's Committee on Social Trends noted. This strategy created artificial demand for products which people could not ordinarily afford. It put off the day of reckoning, but it made the downfall worse when it came.

Mass speculation went on throughout the late 1920's. In 1929 alone, a record volume of 1,124,800,410 shares were traded on the New York Stock Exchange. From early 1928 to September 1929 the Dow Jones Industrial Average rose from 191 to 381. This sort of profit was irresistible to investors. Company earnings became of little interest; as long as stock prices continued to rise huge profits could be made.

Prices had been drifting downward since September 3, but generally people were optimistic. Speculators continued to flock to the market ... Once enough investors had decided the boom was over, it was over. Partial recovery was achieved on Friday and Saturday when a group of leading bankers stepped in to try to stop the crash. But then on Monday the 28th prices started dropping again. By the end of the day the market had fallen 13%. The next day, Black Tuesday an unprecedented 16.4 million shares changed hands. Stocks fell so much, that at many times during the day no buyers were available at any price.

More jobs were lost, more stores were closed, more banks went under, and more factories closed. Unemployment grew to five million in 1930, and up to thirteen million in 1932. The country spiraled quickly into catastrophe. The Great Depression had begun.



understanding right wing thought (english)
04 Sep 2003
If I can recommend a page, the following analysis of 'right wing thought' might help people to comprehend what makes those who are being harmed by these policies still 'follow the leader' (what is really needed now is not more of that screaming back and forth but rather some thoughtful reflection on how to deal with the problem of following leaders, even when leaders are leading people into ruinous destruction, and this involves understanding motives, and then perhaps developing real strategies for action - screaming insults, by the way, is not a real strategy for action, and seems to be based for the most part on a lack of understanding of right wing thought, and so such a study might be helpful)
See also:
http://www.awitness.org/journal/political_conservatism_as_motivated_social_cognition_summary.html