By: Dr. J. P. Hubert
On a party-line vote the Republicans in the US House of Representatives yesterday passed Congressman Paul Ryan's Deficit Reduction Plan which would put an end to Medicare and Medicaid as they now exist.
According to the plan, by 2022, American's would no longer be enrolled in Medicare Part B. Instead, the elderly would be given fixed dollar amounts each year with which to purchase private health insurance coverage--through a kind of voucher program .
Given that elderly patients represent an unacceptable risk pool for insurance companies, the logical outcome is that most senior Americans would be incapable of obtaining health insurance at all. This of course is a radical form of health care rationing or what might better be termed legislative assisted suicide/homicide given the elevated incidence of serious disease among those advanced in age.
All House Democrats and only 4 Republican House members voted against the Ryan measure which is not currently expected to pass the US Senate.
Showing posts with label Austerity Programs. Show all posts
Showing posts with label Austerity Programs. Show all posts
Saturday, April 16, 2011
Obama's Deficit Plan a boon to Super-Rich While Impoverishing Poor and Middle Class
Editor's NOTE:
The piece below by Kevin Zeese is a follow-up to my yesterday's post. Zeese agrees that the real money to be saved lies in the military/national security budgets.
Zeese has made multiple other observations which are spot-on including his remarks vis a vis the problems with the Obama Health Care Plan and the concentration of wealth into a progressively smaller portion of the US population. This is an excellent essay. Please read the entire article and forward to friends and other interested parties.
For a quick review of just how concentrated the wealth in America has become see the data below.
Key Tax Facts: (from Institute for Policy Studies article)
•15,753: The number of households in 1961 with $1 million in taxable income (adjusted for inflation).
•361,000: The number of households in 2011 estimated to have $1 million in taxable income.
•43.1: Percent of total reported income that Americans earning $1 million paid in taxes in 1961 (adjusted for 2011 dollars)
•23.1: Percent of total reported income that Americans earning $1 million are likely to pay in taxes in 2011, estimated from latest IRS data.
•47.4: Percent of profits corporations paid in taxes in 1961.
•11.1: Percent of profits corporations paid in taxes in 2011.
--Dr. J. P. Hubert
Obama's Deficit Plan will Impoverish Main Street America
by Kevin Zeese
Global Research
April 14, 2011
President Obama announced the outlines of his deficit plan, leaving a lot up for negotiation. He planted his poll at the center right and where he ends up, with his history of compromising to bring right wing Republicans and Democratic corporatists together, can only be worse.
I was pleasantly surprised to see groups that usually side with Obama even criticizing him. True Majority/US Action wrote
“Obama wants to cut $4 trillion, but not $1 from the Pentagon,” in their headline. They go on to point out that “President Obama today proposed reducing the deficit through almost $800 billion in cuts.”
They correctly point out that the country needs jobs not deficit cuts, and if cuts are going to be made they should not be made in domestic programs where funds are needed but in the military writing:
“Over half of the money Congress makes decisions on goes directly into the Pentagon’s pocket, and that doesn't count the money for actual wars. But instead of cutting the Pentagon budget, Obama is proposing over $700 billion in cuts to programs that benefit the poor, seniors and children, while only trying to save $400 billion on war and weapons.”
When there are no real cuts for the Pentagon, just slower growth, it means that the rest of discretionary spending will face real cuts. Everything from education to the environment, health care to safety will be cut and every American will feel it.
When it comes to taxes, the president is seeking small increases on the wealthiest. A critical part of solving the economic problems in the United States, not just the deficit problems, is fixing the dramatic upward shift of income and wealth to the economic elite. The corporate cronyism of the last three decades has left the middle class, working class and poor with few resources, but the wealthiest have become gluttonously rich.
The vast majority of the income gains in the United States over the last three decades have gone to the richest 5% of the population with the greatest gains in the top 0.5%. This funneling of wealth to the top came as a result of policies that were explicitly designed to redistribute income upwards beginning with President Reagan’s “trickle down economics” and continuing with the Bush tax cuts and the Obama/Bush Wall Street bailouts. In fact, during the economic expansion from 2002-2007 the top 1% captured two-thirds of income growth. Now, the top 1% has 70% of the wealth of the nation. To balance the budget, the government needs to go where the money is. As a result, it is far more appropriate to tax the richest that have prospered then to cut essential services for the broad middle class which has suffered.
The funneling of wealth to the top has been due to tax payer subsidies, tax breaks and corporate welfare to concentrated corporate interests and tax breaks for the wealthiest Americans. This is a major source of the national debt. From 2001-2008, tax cuts for the wealthy cost the U.S. Treasury $700 billion, all adding to the national debt.
There are 7,500 households in the United States with annual incomes over $20 million. Over the last two and a half decades, this is the group that has profited from a tax system designed to favor the wealthiest. America’s highest earners – the top 400 – have seen their share of income paid in federal income tax plummet from 51.2% in 1955 to 16.6% in 2007, the most recent year with top 400 statistics available. Congress should boost the top tax rate to 50% on annual incomes over $5 million and to 70% on incomes over $10 million. This would generate an additional $105 billion annually, going a long way toward getting our fiscal house in order.
Last week the Institute for Policy Studies issued a report, "Unnecessary Austerity, Unnecessary Shutdown", which showed that austerity was not really needed. The report pointed out “we're not broke. Not even close. The United States of America is awash in wealth. Our corporations are holding record trillions in cash. And overall individual wealth in the United States, the Credit Suisse Research Institute reported this past fall, has risen 23 percent since the year 2000, to $236,213 per American adult.” They point to five tax revenue reforms that could raise a total of as much as $4 trillion over the next decade. The vast majority of Americans would see no tax increase from any of these reforms:
• Establish several higher income tax brackets for millionaires: $60-$80 billion a year
• Scrap overseas corporate tax havens: $100 billion a year
• Introduce a modest financial transaction tax: $150 billion a year
• Revamp the estate tax to include progressive rates: $25 billion a year
• End preferential treatment for income from dividends and capital gains: $88 billion
The largest caucus in Congress, the Progressive Caucus, put forward an alternative budget as well. The CPC Budget would balance the budget by 2014 and create a budget surplus by 2021. And, they were also able to reduce the deficit by $5.7 trillion from 2012 to 2021. They do not do this with magic, they achieve these goals with common sense – they go to where the money is the wealthiest Americans and corporations that have profited from government programs, the military and security state apparatus that spends 66% of federal discretionary spending and by getting the economy growing again.
These are the types of taxes on the wealthiest Americans and corporations where President Obama should have started the discussion. It he had taken this approach and seriously cut the military budget he would surpass the deficit cutting goals of even the most extreme Republican and provide enough money to build a clean energy economy that would be sustainable for the 21st Century.
That brings me to my final point, health care. Rep. Paul Ryan has made destruction of Medicare the centerpiece of his deficit cutting plan. Medicare is the most cost-efficient part of U.S. health care that covers everyone over 65 years old. Ryan is seeking to give it to the insurance industry and funnel trillions of dollars to them. Sadly, this builds on the mistake of President Obama’s health care bill. Rather than building on a successful public health program, Medicare, Obama and the corporate Democrats decided to further entrench the insurance industry. The hundreds of millions in annual tax subsidies they will get from ObamaCare are not enough. Their appetite for profits is unquenchable, now they want trillions by privatizing Medicare and Rep. Ryan is trying to sell it for them. On its face the proposal is absurd: how do you save money by putting in place a middleman who takes 15% to 20% of the funding of health care for its profits, executive salaries, advertising and investments in property and other profit centers? Ryan would leave seniors with insufficient funds to pay for health care.
On health care another Democratic loyalist got it right in reaction to the budget debate. Robert Reich wrote pointedly: Mr. President: Why Medicare Isn't the Problem, It's the Solution. He points out facts that every American paying attention should know. The U.S spends “more on health care per person than any other advanced nation and get less for our money. Yearly public and private healthcare spending is $7,538 per person. That's almost two and a half times the average of other advanced nations.” He points out a few more nuggets about the failed American health care system:
- America spends $30 billion a year fixing medical errors - the worst rate among advanced countries.
- Administrative costs eat up 15 to 30% of all healthcare spending in the United States. That's twice the rate of most other advanced nations.
- A third of nursing hours are devoted to documenting what's happened so insurers have proof.
And, how is Medicare the solution? Well first off, many economists correctly point out that health care is the driver of deficits at the state and national levels of government for the foreseeable future. Cutting Medicare funding does not deal with any of the underlying problems in the U.S. health care system it just results in seniors having less health care. Reich points out:
“Estimates of how much would be saved by extending Medicare to cover the entire population range from $58 billion to $400 billion a year. More Americans would get quality health care, and the long-term budget crisis would be sharply reduced.”
Improved Medicare, expanded to cover everyone is the solution to the U.S. health care crisis it results in lower costs, better coverage and better health outcomes for everyone in the United States. (Editor's bold emphasis throughout)
Once again President Obama has missed an opportunity to get the country on the right track. And, if his previous negotiations with the Republicans are a measure of the likely outcome, his already weak proposal is going to get worse – worse for the middle class, working class and poor. The military, security state and wealthy – they will be fine.
The piece below by Kevin Zeese is a follow-up to my yesterday's post. Zeese agrees that the real money to be saved lies in the military/national security budgets.
Zeese has made multiple other observations which are spot-on including his remarks vis a vis the problems with the Obama Health Care Plan and the concentration of wealth into a progressively smaller portion of the US population. This is an excellent essay. Please read the entire article and forward to friends and other interested parties.
For a quick review of just how concentrated the wealth in America has become see the data below.
Key Tax Facts: (from Institute for Policy Studies article)
•15,753: The number of households in 1961 with $1 million in taxable income (adjusted for inflation).
•361,000: The number of households in 2011 estimated to have $1 million in taxable income.
•43.1: Percent of total reported income that Americans earning $1 million paid in taxes in 1961 (adjusted for 2011 dollars)
•23.1: Percent of total reported income that Americans earning $1 million are likely to pay in taxes in 2011, estimated from latest IRS data.
•47.4: Percent of profits corporations paid in taxes in 1961.
•11.1: Percent of profits corporations paid in taxes in 2011.
--Dr. J. P. Hubert
Obama's Deficit Plan will Impoverish Main Street America
by Kevin Zeese
Global Research
April 14, 2011
President Obama announced the outlines of his deficit plan, leaving a lot up for negotiation. He planted his poll at the center right and where he ends up, with his history of compromising to bring right wing Republicans and Democratic corporatists together, can only be worse.
I was pleasantly surprised to see groups that usually side with Obama even criticizing him. True Majority/US Action wrote
“Obama wants to cut $4 trillion, but not $1 from the Pentagon,” in their headline. They go on to point out that “President Obama today proposed reducing the deficit through almost $800 billion in cuts.”
They correctly point out that the country needs jobs not deficit cuts, and if cuts are going to be made they should not be made in domestic programs where funds are needed but in the military writing:
“Over half of the money Congress makes decisions on goes directly into the Pentagon’s pocket, and that doesn't count the money for actual wars. But instead of cutting the Pentagon budget, Obama is proposing over $700 billion in cuts to programs that benefit the poor, seniors and children, while only trying to save $400 billion on war and weapons.”
When there are no real cuts for the Pentagon, just slower growth, it means that the rest of discretionary spending will face real cuts. Everything from education to the environment, health care to safety will be cut and every American will feel it.
When it comes to taxes, the president is seeking small increases on the wealthiest. A critical part of solving the economic problems in the United States, not just the deficit problems, is fixing the dramatic upward shift of income and wealth to the economic elite. The corporate cronyism of the last three decades has left the middle class, working class and poor with few resources, but the wealthiest have become gluttonously rich.
The vast majority of the income gains in the United States over the last three decades have gone to the richest 5% of the population with the greatest gains in the top 0.5%. This funneling of wealth to the top came as a result of policies that were explicitly designed to redistribute income upwards beginning with President Reagan’s “trickle down economics” and continuing with the Bush tax cuts and the Obama/Bush Wall Street bailouts. In fact, during the economic expansion from 2002-2007 the top 1% captured two-thirds of income growth. Now, the top 1% has 70% of the wealth of the nation. To balance the budget, the government needs to go where the money is. As a result, it is far more appropriate to tax the richest that have prospered then to cut essential services for the broad middle class which has suffered.
The funneling of wealth to the top has been due to tax payer subsidies, tax breaks and corporate welfare to concentrated corporate interests and tax breaks for the wealthiest Americans. This is a major source of the national debt. From 2001-2008, tax cuts for the wealthy cost the U.S. Treasury $700 billion, all adding to the national debt.
There are 7,500 households in the United States with annual incomes over $20 million. Over the last two and a half decades, this is the group that has profited from a tax system designed to favor the wealthiest. America’s highest earners – the top 400 – have seen their share of income paid in federal income tax plummet from 51.2% in 1955 to 16.6% in 2007, the most recent year with top 400 statistics available. Congress should boost the top tax rate to 50% on annual incomes over $5 million and to 70% on incomes over $10 million. This would generate an additional $105 billion annually, going a long way toward getting our fiscal house in order.
Last week the Institute for Policy Studies issued a report, "Unnecessary Austerity, Unnecessary Shutdown", which showed that austerity was not really needed. The report pointed out “we're not broke. Not even close. The United States of America is awash in wealth. Our corporations are holding record trillions in cash. And overall individual wealth in the United States, the Credit Suisse Research Institute reported this past fall, has risen 23 percent since the year 2000, to $236,213 per American adult.” They point to five tax revenue reforms that could raise a total of as much as $4 trillion over the next decade. The vast majority of Americans would see no tax increase from any of these reforms:
• Establish several higher income tax brackets for millionaires: $60-$80 billion a year
• Scrap overseas corporate tax havens: $100 billion a year
• Introduce a modest financial transaction tax: $150 billion a year
• Revamp the estate tax to include progressive rates: $25 billion a year
• End preferential treatment for income from dividends and capital gains: $88 billion
The largest caucus in Congress, the Progressive Caucus, put forward an alternative budget as well. The CPC Budget would balance the budget by 2014 and create a budget surplus by 2021. And, they were also able to reduce the deficit by $5.7 trillion from 2012 to 2021. They do not do this with magic, they achieve these goals with common sense – they go to where the money is the wealthiest Americans and corporations that have profited from government programs, the military and security state apparatus that spends 66% of federal discretionary spending and by getting the economy growing again.
These are the types of taxes on the wealthiest Americans and corporations where President Obama should have started the discussion. It he had taken this approach and seriously cut the military budget he would surpass the deficit cutting goals of even the most extreme Republican and provide enough money to build a clean energy economy that would be sustainable for the 21st Century.
That brings me to my final point, health care. Rep. Paul Ryan has made destruction of Medicare the centerpiece of his deficit cutting plan. Medicare is the most cost-efficient part of U.S. health care that covers everyone over 65 years old. Ryan is seeking to give it to the insurance industry and funnel trillions of dollars to them. Sadly, this builds on the mistake of President Obama’s health care bill. Rather than building on a successful public health program, Medicare, Obama and the corporate Democrats decided to further entrench the insurance industry. The hundreds of millions in annual tax subsidies they will get from ObamaCare are not enough. Their appetite for profits is unquenchable, now they want trillions by privatizing Medicare and Rep. Ryan is trying to sell it for them. On its face the proposal is absurd: how do you save money by putting in place a middleman who takes 15% to 20% of the funding of health care for its profits, executive salaries, advertising and investments in property and other profit centers? Ryan would leave seniors with insufficient funds to pay for health care.
On health care another Democratic loyalist got it right in reaction to the budget debate. Robert Reich wrote pointedly: Mr. President: Why Medicare Isn't the Problem, It's the Solution. He points out facts that every American paying attention should know. The U.S spends “more on health care per person than any other advanced nation and get less for our money. Yearly public and private healthcare spending is $7,538 per person. That's almost two and a half times the average of other advanced nations.” He points out a few more nuggets about the failed American health care system:
- America spends $30 billion a year fixing medical errors - the worst rate among advanced countries.
- Administrative costs eat up 15 to 30% of all healthcare spending in the United States. That's twice the rate of most other advanced nations.
- A third of nursing hours are devoted to documenting what's happened so insurers have proof.
And, how is Medicare the solution? Well first off, many economists correctly point out that health care is the driver of deficits at the state and national levels of government for the foreseeable future. Cutting Medicare funding does not deal with any of the underlying problems in the U.S. health care system it just results in seniors having less health care. Reich points out:
“Estimates of how much would be saved by extending Medicare to cover the entire population range from $58 billion to $400 billion a year. More Americans would get quality health care, and the long-term budget crisis would be sharply reduced.”
Improved Medicare, expanded to cover everyone is the solution to the U.S. health care crisis it results in lower costs, better coverage and better health outcomes for everyone in the United States. (Editor's bold emphasis throughout)
Once again President Obama has missed an opportunity to get the country on the right track. And, if his previous negotiations with the Republicans are a measure of the likely outcome, his already weak proposal is going to get worse – worse for the middle class, working class and poor. The military, security state and wealthy – they will be fine.
Wednesday, December 15, 2010
Western Civilization and Classical Economics: The Immorality of Austerity
Editor's NOTE:
I think this piece by professor Kozy is spot on although I disagree with his conclusion as follows:
"All the moral codes mentioned in this piece are Western in origin; yet none now plays a role in how the people of this civilization behave. When a civilization abandons its morality, no rationalization can be devised to justify its continued existence. It is likely that many reasons can be given for this abandonment, although I am convinced that one predominates—the expansion of law."
By Prof. John Kozy
Global Research HERE...
December 12, 2010
Numerous critics of classical economics over the past two centuries have argued that it is immoral when judged by any of the recognized moral codes. Major aspects of it clearly violate the Golden Rule. It violates many, perhaps all, of the Ten Commandments. It conflicts with various teachings of Jesus. Aristotle's Ethics can be used to demonstrate its viciousness. It violates Kant's Categorical Imperative and Mill's Utilitarianism. Yet some of its proponents continue to argue that The Wealth of Nations is not inconsistent with moral principles. Clive Cook and Gavin Kennedy recently made such a claim, but what they cite as evidence doesn't withstand scrutiny.
First of all, they base the claim on Smith's earlier book, The Theory of Moral Sentiments, in which he argues that conscience results from observing the condition of others, generating sympathy, which then serves as the basis of moral judgments.
Although I have no doubt that different communities view this book differently, the philosophical community has generally considered it sophomoric. In my decades as a professor of philosophy, not once did I see the book included in the standard philosophical curriculum. Most philosophy professors I knew had little knowledge of the book's existence. So even if someone could cogently argue that The Theory of Moral Sentiments and The Wealth of Nations are philosophically consistent, that argument would have little bearing on whether classical economics is moral.
Smith has never been recognized in philosophical circles as a major thinker. As a matter of fact, he's hardly recognized at all. And even some economists have noticed the sophomoric nature of his thinking. One highly respected, renowned economist, whose name I shall let the reader guess at, said this:
"His very limitation made for success. Had he been more brilliant, he would not have been taken so seriously. Had he dug more deeply, had he unearthed more recondite truth, had he used more difficult and ingenious methods, he would not have been understood. But he had no such ambitions; in fact he disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along."
Yet Kennedy lists the elements of morality that Smith included in The Wealth of Nations. "[Smith] was no libertarian. . . . His idea of 'natural liberty' was almost the opposite of what it is usually taken to mean (namely, 'do as you wish'). He was at pains in both books to emphasize the importance of self-control, of regard for the opinions of others, and of an expansive role of government in providing security, rule of law, and economic infrastructure. Way ahead of his time, he was even in favor of compulsory schooling." An interesting list, but not one that justifies the view that Smith's view of the economy is moral. A moralist would have expected to see something about poverty, hunger, and suffering, all of which are absent.
A serious, irrefutable proof of the immorality embodied in The Wealth of Nations and classical economics in general is easily devised.
Classical theorists like Smith aver that products derive their value from the labor that goes into producing them, and that labor, itself, is bought and sold. Wages, which are the price of labor, have a natural price which is the price needed to enable labor to subsist and to perpetuate itself without either increase or decrease. These dogmas are known as the labor theory of value and the subsistence theory of wages respectively. Some revealing implications can be derived from them. First notice this oddity: labor produces products and the amount of labor expended determines their value. But labor is paid not the value of the products it produces but merely a subsistence wage. I defy anyone, economist or not, to justify that principle on moral grounds. Can Cook or Kennedy find an application of sympathy in this principle?
Second, the subsistence theory of wages describes a condition similar to that used by animal husbands in dealing with livestock. Classical economics treats labor as animal husbandry treats cows. Can treating a fellow human being as a farm animal ever be morally justified? Where is sympathy found in this? Working people, labor, those who create all the culture's wealth, are nothing but farm, factory, and when necessary, cannon fodder.
But economists will say that these aspects of classical economics are not paid much attention any more. Perhaps, but what economists pay attention to and what goes on in the economy are different things. The Wall Street Journal's report that 70 percent of people in North America live paycheck to paycheck demonstrates conclusively that the subsistence theory of wages is still being applied; our economists are just not honest enough to tell us about it.
If a subsistence wage is all that this economy pays working people, how would the culture determine how to treat those people not in the workforce—the aged, the infirm, and the handicapped, even the unemployed? Classical economics has no answer to this question because classical economics does not exist to provide for people generally. Classical economics divides the populace into two groups—capital and labor. Anyone not in one of these groups is somehow irrelevant, which explains why the President and other governmental officials always speak of the upper class and the middle class but never mention the lower class. Yet no one seems to notice that speaking of an upper and middle class without speaking of a lower class is meaningless.
The upshot is that if the dogmas of classical economics are applied consistently, there is no need for any people not capable of functioning in the workforce. So, in keeping with this implication, Andrew Mellon, President Herbert Hoover's treasury secretary recommended that Hoover fight the depression by ”liquidating the farmers, liquidating the workers, and driving down wages."
Of course, if this were openly advocated, the outrage would be uncontrollable and the system would be torn asunder. So this fact is obscured by the provision of "safety nets" that provide little safety, since what they are comprised of cannot exceed or even equal the subsistence wage. So Americans have social security which provides no security, unemployment compensation which is too meager to subsist on, welfare which is really illfare, and chancy access to healthcare at best. Yet those who promote this economy can, it seems, always find money to buttress business, create killing machines, and fight continual wars. What few seem to realize is that these consequences are logical implications of the dogmas of classical economics and come straight out of Adam Smith's Wealth of Nations. Livestock, when unneeded, are routinely shipped to slaughter.
The United States and much of the so-called Western World are wallowing in widespread budgetary and sovereign debt crises, and the world's financial elite are forcing many European nations into severe austerity programs much to the chagrin of European peoples. Some of these nations have been referred to by the acronym PIGS, which is apt since pigs are a species of livestock. So what we have, of course, is swineherds sacrificing their livestock for the benefit of the international financial community which cares nothing for people or even the nations they reside in. These financiers validate Jefferson's view that merchants have no country. They also have no morality, not even a smidgen. Neither do the economists who promote this economy.
Signs that the American swineherds are preparing to abandon their own herd by imposing an austerity program on it are displayed in the report of Obama's Deficit Reduction Commission and the insistence of our Republican Congressmen that spending on "entitlements" either be reduced or paid for while spending on wars, foreign aid, and the military be allowed to continue and even increase without any provisions whatsoever for paying for them. The only conclusion that can be drawn is that warfare and foreign aid are necessary economic principals while the American people have fallen into that group of economically irrelevant people that those like Andrew Mellon would have the government liquidate. So the unemployed should be allowed to starve, and the ill should be allowed to perish—both of which principles are perfectly consistent with the "morality" of classical economics.
Yet the most difficult thing to understand is what the proponents of this economy believe the purpose of it all is. What is the goal of all of this destruction, suffering, and killing? Does it give them some kind of deranged pride? Does a banker really feel good when he is told his bank evicted hundreds of families in the past week? Does a general rejoice when he is told that dozens of the enemy and scores of his own troops have been killed in the battle just fought? Does a legislator drink a toast to progress when it is learned that hundreds of children in her/his district go to bead hungry each night? If so, what kind of human beings are they? If not, just what can they possibly be thinking?
All the moral codes mentioned in this piece are Western in origin; yet none now plays a role in how the people of this civilization behave. When a civilization abandons its morality, no rationalization can be devised to justify its continued existence. It is likely that many reasons can be given for this abandonment, although I am convinced that one predominates—the expansion of law. Law once governed various kinds of behavior. It has now encroached upon various kinds of speech and is even being applied to the realm of belief. If there is a single aspect of human life that is not now circumscribed by law, I do not know of it. So when someone is accused of having done something wrong, the reply offered usually is something like, "What was done complied with all legal requirements." But "right" has never been defined as "conforms to law," because thoughtful people have long noticed that the law itself can be a great crime, and that the worst criminals in a culture can be its lawgivers, as the people of Ireland, Portugal, France, Spain, Greece, and Great Britain are now finding out. Americans will soon find it out too.
I think this piece by professor Kozy is spot on although I disagree with his conclusion as follows:
"All the moral codes mentioned in this piece are Western in origin; yet none now plays a role in how the people of this civilization behave. When a civilization abandons its morality, no rationalization can be devised to justify its continued existence. It is likely that many reasons can be given for this abandonment, although I am convinced that one predominates—the expansion of law."
Professor Kozy should have argued that when a civilization abandons its morality, nothing but great suffering follows including eventual destruction of the civilization entirely. However, in the meantime, more and more draconian laws are required in order to prevent widespread illegal/immoral activity. The "expansion of law" is the necessary substitute for the self-control and virtuous behavior which once existed--the goal of morality writ large after all. The increasingly restrictive laws are the consequence of a loss of societal morality that is, morally illicit behavior in the aggregate not the cause of the abandonment of morality, as Professor Kozy argues.
I agree that when a civilization abandons morality its existence cannot be justified. This however is more a matter of the natural moral law than any premeditated notion/action of bringing the civilization to an end. Immoral societies are simply incapable of flourishing for any great length of time as they do not promote the "common good" but rather are directed at the enrichment of the few over the many. Under such a scenario there is no societal cohesiveness. The end result is that the society of necessity comes apart.
The situation in contemporary America is one in which traditional morality has been abandoned. What we are witnessing is the expected dissolution of the nation. The rate of destruction will likely increase as the total societal moral depravity increases.
--Dr. J. P. Hubert
By Prof. John Kozy
Global Research HERE...
December 12, 2010
Numerous critics of classical economics over the past two centuries have argued that it is immoral when judged by any of the recognized moral codes. Major aspects of it clearly violate the Golden Rule. It violates many, perhaps all, of the Ten Commandments. It conflicts with various teachings of Jesus. Aristotle's Ethics can be used to demonstrate its viciousness. It violates Kant's Categorical Imperative and Mill's Utilitarianism. Yet some of its proponents continue to argue that The Wealth of Nations is not inconsistent with moral principles. Clive Cook and Gavin Kennedy recently made such a claim, but what they cite as evidence doesn't withstand scrutiny.
First of all, they base the claim on Smith's earlier book, The Theory of Moral Sentiments, in which he argues that conscience results from observing the condition of others, generating sympathy, which then serves as the basis of moral judgments.
Although I have no doubt that different communities view this book differently, the philosophical community has generally considered it sophomoric. In my decades as a professor of philosophy, not once did I see the book included in the standard philosophical curriculum. Most philosophy professors I knew had little knowledge of the book's existence. So even if someone could cogently argue that The Theory of Moral Sentiments and The Wealth of Nations are philosophically consistent, that argument would have little bearing on whether classical economics is moral.
Smith has never been recognized in philosophical circles as a major thinker. As a matter of fact, he's hardly recognized at all. And even some economists have noticed the sophomoric nature of his thinking. One highly respected, renowned economist, whose name I shall let the reader guess at, said this:
"His very limitation made for success. Had he been more brilliant, he would not have been taken so seriously. Had he dug more deeply, had he unearthed more recondite truth, had he used more difficult and ingenious methods, he would not have been understood. But he had no such ambitions; in fact he disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along."
Yet Kennedy lists the elements of morality that Smith included in The Wealth of Nations. "[Smith] was no libertarian. . . . His idea of 'natural liberty' was almost the opposite of what it is usually taken to mean (namely, 'do as you wish'). He was at pains in both books to emphasize the importance of self-control, of regard for the opinions of others, and of an expansive role of government in providing security, rule of law, and economic infrastructure. Way ahead of his time, he was even in favor of compulsory schooling." An interesting list, but not one that justifies the view that Smith's view of the economy is moral. A moralist would have expected to see something about poverty, hunger, and suffering, all of which are absent.
A serious, irrefutable proof of the immorality embodied in The Wealth of Nations and classical economics in general is easily devised.
Classical theorists like Smith aver that products derive their value from the labor that goes into producing them, and that labor, itself, is bought and sold. Wages, which are the price of labor, have a natural price which is the price needed to enable labor to subsist and to perpetuate itself without either increase or decrease. These dogmas are known as the labor theory of value and the subsistence theory of wages respectively. Some revealing implications can be derived from them. First notice this oddity: labor produces products and the amount of labor expended determines their value. But labor is paid not the value of the products it produces but merely a subsistence wage. I defy anyone, economist or not, to justify that principle on moral grounds. Can Cook or Kennedy find an application of sympathy in this principle?
Second, the subsistence theory of wages describes a condition similar to that used by animal husbands in dealing with livestock. Classical economics treats labor as animal husbandry treats cows. Can treating a fellow human being as a farm animal ever be morally justified? Where is sympathy found in this? Working people, labor, those who create all the culture's wealth, are nothing but farm, factory, and when necessary, cannon fodder.
But economists will say that these aspects of classical economics are not paid much attention any more. Perhaps, but what economists pay attention to and what goes on in the economy are different things. The Wall Street Journal's report that 70 percent of people in North America live paycheck to paycheck demonstrates conclusively that the subsistence theory of wages is still being applied; our economists are just not honest enough to tell us about it.
If a subsistence wage is all that this economy pays working people, how would the culture determine how to treat those people not in the workforce—the aged, the infirm, and the handicapped, even the unemployed? Classical economics has no answer to this question because classical economics does not exist to provide for people generally. Classical economics divides the populace into two groups—capital and labor. Anyone not in one of these groups is somehow irrelevant, which explains why the President and other governmental officials always speak of the upper class and the middle class but never mention the lower class. Yet no one seems to notice that speaking of an upper and middle class without speaking of a lower class is meaningless.
The upshot is that if the dogmas of classical economics are applied consistently, there is no need for any people not capable of functioning in the workforce. So, in keeping with this implication, Andrew Mellon, President Herbert Hoover's treasury secretary recommended that Hoover fight the depression by ”liquidating the farmers, liquidating the workers, and driving down wages."
Of course, if this were openly advocated, the outrage would be uncontrollable and the system would be torn asunder. So this fact is obscured by the provision of "safety nets" that provide little safety, since what they are comprised of cannot exceed or even equal the subsistence wage. So Americans have social security which provides no security, unemployment compensation which is too meager to subsist on, welfare which is really illfare, and chancy access to healthcare at best. Yet those who promote this economy can, it seems, always find money to buttress business, create killing machines, and fight continual wars. What few seem to realize is that these consequences are logical implications of the dogmas of classical economics and come straight out of Adam Smith's Wealth of Nations. Livestock, when unneeded, are routinely shipped to slaughter.
The United States and much of the so-called Western World are wallowing in widespread budgetary and sovereign debt crises, and the world's financial elite are forcing many European nations into severe austerity programs much to the chagrin of European peoples. Some of these nations have been referred to by the acronym PIGS, which is apt since pigs are a species of livestock. So what we have, of course, is swineherds sacrificing their livestock for the benefit of the international financial community which cares nothing for people or even the nations they reside in. These financiers validate Jefferson's view that merchants have no country. They also have no morality, not even a smidgen. Neither do the economists who promote this economy.
Signs that the American swineherds are preparing to abandon their own herd by imposing an austerity program on it are displayed in the report of Obama's Deficit Reduction Commission and the insistence of our Republican Congressmen that spending on "entitlements" either be reduced or paid for while spending on wars, foreign aid, and the military be allowed to continue and even increase without any provisions whatsoever for paying for them. The only conclusion that can be drawn is that warfare and foreign aid are necessary economic principals while the American people have fallen into that group of economically irrelevant people that those like Andrew Mellon would have the government liquidate. So the unemployed should be allowed to starve, and the ill should be allowed to perish—both of which principles are perfectly consistent with the "morality" of classical economics.
Yet the most difficult thing to understand is what the proponents of this economy believe the purpose of it all is. What is the goal of all of this destruction, suffering, and killing? Does it give them some kind of deranged pride? Does a banker really feel good when he is told his bank evicted hundreds of families in the past week? Does a general rejoice when he is told that dozens of the enemy and scores of his own troops have been killed in the battle just fought? Does a legislator drink a toast to progress when it is learned that hundreds of children in her/his district go to bead hungry each night? If so, what kind of human beings are they? If not, just what can they possibly be thinking?
All the moral codes mentioned in this piece are Western in origin; yet none now plays a role in how the people of this civilization behave. When a civilization abandons its morality, no rationalization can be devised to justify its continued existence. It is likely that many reasons can be given for this abandonment, although I am convinced that one predominates—the expansion of law. Law once governed various kinds of behavior. It has now encroached upon various kinds of speech and is even being applied to the realm of belief. If there is a single aspect of human life that is not now circumscribed by law, I do not know of it. So when someone is accused of having done something wrong, the reply offered usually is something like, "What was done complied with all legal requirements." But "right" has never been defined as "conforms to law," because thoughtful people have long noticed that the law itself can be a great crime, and that the worst criminals in a culture can be its lawgivers, as the people of Ireland, Portugal, France, Spain, Greece, and Great Britain are now finding out. Americans will soon find it out too.
Monday, November 22, 2010
Destructive Neoliberal Austerity
Editor's NOTE:
The all too obvious way to markedly reduce federal government spending, the federal budget deficit and to begin seriously reducing the national debt is to slash the trillion dollar per year war budget and end the foreign wars/occupations.
Realistically, the United States should be spending no more than 250 billion dollars per annum on "defense" related outlays at a maximum, including the various "black-ops" budgets and National Security related "necessities."
It is now clear that US military/paramilitary presence abroad is contributing to the creation of insurgents and so-called terrorists who then through their desire to do us harm force us to further increase our footprint overseas in an attempt to neutralize them. This is an absolutely absurd situation which essentially amounts to a destructive kind of positive feedback loop (more foreign US military/paramilitary presence means more foreign terrorists which necessitate more US forces ad-naseum).
The elites currently in charge of the MIMIC clearly understand this all too well and it would appear have two basic reasons for failing to stop the madness:
1) Waging foreign wars is extermely lucrative for a powerful and wealthy minority.
2) The USA is so close to being actually bankrupt that those in control of the "not so shadow government" are afraid to slash the war making budget lest our creditors; China, Japan, Germany etc. recognize that the "emperor has no clothes" and simultaneously demand payment for our debt that they hold. Our nuclear stockpile and conventional/special force posture is such that these creditors currently fear making the kinds of demands that they would if we were to suddenly lose our war-making capability.
As long as the non-elites tolerate the status quo, there is no incentive for those in charge of the Regime to change it. Apparently an effective unemployment rate >20% and a record home foreclosure rate is not enough of an impetus for them to stop the wars and slash the "defense" budget. Until we do, no program of austerity aimed at non-defense descretionary/non-discretionary spending will dig us out of the hole we are in.
SOLUTION:
Stop the wars, slash military spending, end the empire, end unfair trade practices and re-build a credible manufacturing base!
No nation can long survive which cannot manufacture the products necessary to sustain everyday existence. At present, the USA is capable of manufacturing little else than advanced military weapons.
Where are the Historians who should be lecturing us on the fall of the Roman Empire? The comparisons to 21st century America are stark indeed.
--Dr. J. P. Hubert
Destructive Neoliberal Austerity
Stephen Lendman
Monday 2010-11-22
warisacrime.org
Instead of vitally needed stimulus, Washington and European governments dictate austerity. The pretext of deficit reduction is being used to transfer more wealth to those already with too much, plus the usual canard over the urgency to save national banking systems.
In other words, make ordinary people bear the burden of bailing out banking giants responsible for the severest economic crisis since the Great Depression. How? The usual IMF solution, involving preservation of capital at the expense of workers - a package including wage and benefit cuts, less social spending, privatization of state resources, mass layoffs, deregulation, lower "onerous" taxes, maintaining corporate debt service, and harsh crackdowns against resisters.
In the 1980s, it was called Reaganomics, trickle down, and Thatcherism. Today it's destructive "shock therapy" called austerity, the same scheme pitting capital against people - disposable workers tossed out for big money's gain.
It's how predatory capitalism works, destructively for so many to enrich an elite few - snake oil peddled as an economic elixir, corrupted politicians and central bankers forcing harmful policies that, in fact, don't work.
Three years of failure showed imposed measures have hurt, not helped, and the longer they continue, the more sickness will spread and deepen, causing imposed poverty. It's why independent experts see long-term depression, rising unemployment, human deprivation, and bigger than ever bonuses for bankers until the inevitable house of cards collapses. Welcome to the new world order, phase two.
In America, the Fed furiously monitized debt. First QE I, now II, likely III and IV coming that could have worked the first time if constructively, not destructively used. An earlier article explained, accessed through the following link:
http://sjlendman.blogspot.com/2010/11/quantitative-easing-elixir-or-pois...
Swapping credit for toxic assets helps banks, not the economy. However, using it for productive investment works. In her September 8 Webofdebt.com article titled, "How to Reverse A Deflation: Helicopter Ben Needs to Drop Some Money on Main Street," Ellen Brown explained that:
"Running the government's printing presses to pay its bills has not seriously been tried since the Civil War, when President Lincoln saved the North from a crippling war debt at usurious interest rates by printing greenbacks (US notes, interest free). Other countries, however, have tested and proven this model more recently. They include Germany, which pulled itself out of a massive financial collapse in the early 1930s by printing a form of currency called "MEFO bills," and Australia, New Zealand and Canada, all of which successfully funded public works in the first half of the 20th century simply by advancing the credit of the nation. China, Malaysia, Guernsey, Jersey, India, Argentina, and other countries" also tried it successfully during hard times to revive their economies.
Why not ailing America and European ones today. Central bank money creation (credit) for public projects and other productive investments stimulates economic growth, creates jobs, and turns depression into prosperity - inflation free by keeping credit and productive investment in balance. Whenever and wherever it's been tried, it worked when done right.
Instead, sweeping austerity measures are dictated for America and Europe. Last spring, an EU summit announced a Greece bailout package, dependent on "budgetary discipline" and imposed poverty, the same IMF prescription for Latvia, Iceland, Hungary, Romania, and Ukraine. Now eurozone shock therapy, what economist Michael Hudson calls a:
"neoliberal experiment....to drastically change the laws and structure of how European society will function for the next generation. If (successful, they'll) break up Europe, destroy the internal market, and render that continent a backwater."
Calling it a "financial coup d'etat," he said "bankers are demanding (and getting governments to) rebuild their loan reserves at labor's expense," Washington using the same ugly scheme.
Throughout the West, neoliberals are empowered. "From Brussels to Latvia, (they) aim to shrink their economies (by) roll(ing) back wage levels by 30 percent or more - depression-style levels," making Europe and America banana republics.
In late September, EU countries, led by Germany, increased pressure on member states to cut deficits by lower public spending, Chancellor Angela Merkel, in fact, demanding sanctions on offenders and suspending their voting rights for continued policy breaches. At the same time, corporate taxes have been cut, continuing a burden shift to workers. Since 2000, 12 of the 27 EU countries raised VAT rates, Hungary, Denmark and Sweden now charging 25% for commodity purchases while wages and benefits are being slashed. Some new world.
Across the continent, painful worker hammering continues, Ireland the latest troubled country making headlines. On November 13, Wall Street Journal writers Neil Shah and Marcus Walker wrote: "Ireland Stirs Specter of EU Default," saying:
"Europe's debt crisis is still smoldering (months) after relative calm," showing it deceptively hid big trouble, awaiting its moment to surface. The challenges facing Ireland "show few signs of abating soon," a worrisome contagion affecting Europe's largest economies, leading analysts to wonder what shoe will drop next.
Workers, of course, are most affected, spending cuts and high unemployment taking a punishing toll. More are coming, assuring greater deprivation and added impetus for increased emigration. Monthly, 1,250 students leave Ireland as well as thousands of young workers, seeing no future at home. Those remaining face growing burdens, including homeowners to avoid forclosure. One in eight mortgages is underwater. The worst is yet to come, and similar trouble affects Greece, Italy, Spain, Portugal, Britain, and elsewhere across the continent, yet policy fixes assure worse ahead, not better.
Also in America, planned austerity the wrong solution for a sick economy, yet bipartisan support and two deficit cutting commissions back it. An earlier article explained, accessed through the following link:
http://sjlendman.blogspot.com/2010/11/obama-teams-deficit-cutting-propos...
It covered Obama's proposed social spending cuts, while leaving defense, banker bailouts, and other corporate subsidies intact, a prescription from hell promising harder than ever hard times for millions. On November 10, Obama's deficit cutting commission outlined its plan. The above link discussed it, a thinly veiled scheme to serve capital, not people when they most need it.
The Bipartisan Policy Center (BPC) was also mentioned, a lesser known group for the same purpose, its proposal imminent at the time. Now it's out with draconian measures as destructive as Obama's commission - proposing Social Security, Medicare, Medicaid, and other social benefit cuts, harming working households most, the way elitists always cheat ordinary people for themselves.
Co-chaired by former Senator Pete Domenici and Alice Rivlin, former director of the Office of Management and Budget and the Congressional Budget Office, it's called "Restoring America's Future," saying:
America "fac(es) two huge challenges that can only be surmounted" by bipartisan support "to curb the mounting debt (to) reinforce recovery, not impede it."
Typical elitist boilerplate, then proposing punishing measures on working households for greater enrichment for themselves. They include:
-- indexing Social Security benefits to life expectancy to reduce benefits as longevity increases; in other words, "incentiviz(ing) people to work longer to compensate for lower benefits;
-- eliminating annual cost of living adjustments (COLAs), justified by claiming inflation is overstated when, in fact, it's higher, especially for retirees facing costly medical expenses;
-- over the next 38 years, "rais(ing) the amount of wages subject to payroll taxes (now capped at $106,800) to cover 90% of all wages" - suggesting bonuses, capital gains, dividends, and other executive compensation be exempt, for many, the lion's share of their earnings;
-- instituting a one-year payroll tax holiday for workers and employers, Social Security to get no funding for 12 months to save an estimated $650 billion; supposedly, future general revenue will replenish the shortfall;
-- cutting Medicare benefits, including by higher Part B premiums (from 25 to 35% of total program costs), co-pays, and fees for outpatients services; also establishing privately owned, lower-cost, health insurance exchanges to be given competitive cost advantages over Medicare - a de facto Trojan horse to replace it eventually, leaving recipients at the mercy of predatory insurers that profit by denying expensive care;
-- by 2018, cutting Medicaid by the amount it grows faster than GDP, providing less care to the indigent, perhaps eventually none;
-- shielding insurers and drug giants from malpractice lawsuits by making it harder to file them; then capping non-economic and punitive damage awards, suits to be adjudicated in "specialized malpractice courts," that may, in fact, be civilian equivalents of military commissions, used to deny so-called "terrorists" due process and judicial fairness;
-- instituting a 6.5% national sales tax (called a Debt Reduction Sales Tax - DRST); like European VATs (value added taxes), they'll hit ordinary people hardest and can be incrementally raised anytime to hit harder;
-- simplifying the tax code to two brackets (15 and 27%), favoring the rich; regressively cutting the top personal and corporate tax rate from 35% to 27%, claiming it "will make the tax system more progressive;"
-- eliminating home mortgage and most other deductions and credits;
-- taxing employer provided health insurance to encourage less comprehensive coverage and make healthcare cost more;
-- freezing non-defense discretionary spending for four years, then capping it according to GDP growth - a prescription to slash social benefits, perhaps eliminating them later;
-- freezing "discretionary" defense spending for five years, then capping it with GDP growth; doing it, among other ways, by "reforming military health care;" in other words, cutting veterans' (and perhaps active duty forces') health benefits; and
-- various other schemes hitting working households hardest.
BPC said "19 Americans (elitist ones) from across the country, with diverse backgrounds and views, examined a broad range of spending and revenue options for the federal government....We believe (their plan) provides a comprehensive, viable path to restore our economy and build a strong America for future generations and for those around the world who look to the United States for leadership and hope."
More boilerplate, disguising a scheme to enrich the few while denying equal opportunity to growing millions, especially the poor, disadvantaged, needy dependents, disabled and retirees, leaving them more than ever on their own and out of luck, the "future America" none of them want or deserve.
The all too obvious way to markedly reduce federal government spending, the federal budget deficit and to begin seriously reducing the national debt is to slash the trillion dollar per year war budget and end the foreign wars/occupations.
Realistically, the United States should be spending no more than 250 billion dollars per annum on "defense" related outlays at a maximum, including the various "black-ops" budgets and National Security related "necessities."
It is now clear that US military/paramilitary presence abroad is contributing to the creation of insurgents and so-called terrorists who then through their desire to do us harm force us to further increase our footprint overseas in an attempt to neutralize them. This is an absolutely absurd situation which essentially amounts to a destructive kind of positive feedback loop (more foreign US military/paramilitary presence means more foreign terrorists which necessitate more US forces ad-naseum).
The elites currently in charge of the MIMIC clearly understand this all too well and it would appear have two basic reasons for failing to stop the madness:
1) Waging foreign wars is extermely lucrative for a powerful and wealthy minority.
2) The USA is so close to being actually bankrupt that those in control of the "not so shadow government" are afraid to slash the war making budget lest our creditors; China, Japan, Germany etc. recognize that the "emperor has no clothes" and simultaneously demand payment for our debt that they hold. Our nuclear stockpile and conventional/special force posture is such that these creditors currently fear making the kinds of demands that they would if we were to suddenly lose our war-making capability.
As long as the non-elites tolerate the status quo, there is no incentive for those in charge of the Regime to change it. Apparently an effective unemployment rate >20% and a record home foreclosure rate is not enough of an impetus for them to stop the wars and slash the "defense" budget. Until we do, no program of austerity aimed at non-defense descretionary/non-discretionary spending will dig us out of the hole we are in.
SOLUTION:
Stop the wars, slash military spending, end the empire, end unfair trade practices and re-build a credible manufacturing base!
No nation can long survive which cannot manufacture the products necessary to sustain everyday existence. At present, the USA is capable of manufacturing little else than advanced military weapons.
Where are the Historians who should be lecturing us on the fall of the Roman Empire? The comparisons to 21st century America are stark indeed.
--Dr. J. P. Hubert
Destructive Neoliberal Austerity
Stephen Lendman
Monday 2010-11-22
warisacrime.org
Instead of vitally needed stimulus, Washington and European governments dictate austerity. The pretext of deficit reduction is being used to transfer more wealth to those already with too much, plus the usual canard over the urgency to save national banking systems.
In other words, make ordinary people bear the burden of bailing out banking giants responsible for the severest economic crisis since the Great Depression. How? The usual IMF solution, involving preservation of capital at the expense of workers - a package including wage and benefit cuts, less social spending, privatization of state resources, mass layoffs, deregulation, lower "onerous" taxes, maintaining corporate debt service, and harsh crackdowns against resisters.
In the 1980s, it was called Reaganomics, trickle down, and Thatcherism. Today it's destructive "shock therapy" called austerity, the same scheme pitting capital against people - disposable workers tossed out for big money's gain.
It's how predatory capitalism works, destructively for so many to enrich an elite few - snake oil peddled as an economic elixir, corrupted politicians and central bankers forcing harmful policies that, in fact, don't work.
Three years of failure showed imposed measures have hurt, not helped, and the longer they continue, the more sickness will spread and deepen, causing imposed poverty. It's why independent experts see long-term depression, rising unemployment, human deprivation, and bigger than ever bonuses for bankers until the inevitable house of cards collapses. Welcome to the new world order, phase two.
In America, the Fed furiously monitized debt. First QE I, now II, likely III and IV coming that could have worked the first time if constructively, not destructively used. An earlier article explained, accessed through the following link:
http://sjlendman.blogspot.com/2010/11/quantitative-easing-elixir-or-pois...
Swapping credit for toxic assets helps banks, not the economy. However, using it for productive investment works. In her September 8 Webofdebt.com article titled, "How to Reverse A Deflation: Helicopter Ben Needs to Drop Some Money on Main Street," Ellen Brown explained that:
"Running the government's printing presses to pay its bills has not seriously been tried since the Civil War, when President Lincoln saved the North from a crippling war debt at usurious interest rates by printing greenbacks (US notes, interest free). Other countries, however, have tested and proven this model more recently. They include Germany, which pulled itself out of a massive financial collapse in the early 1930s by printing a form of currency called "MEFO bills," and Australia, New Zealand and Canada, all of which successfully funded public works in the first half of the 20th century simply by advancing the credit of the nation. China, Malaysia, Guernsey, Jersey, India, Argentina, and other countries" also tried it successfully during hard times to revive their economies.
Why not ailing America and European ones today. Central bank money creation (credit) for public projects and other productive investments stimulates economic growth, creates jobs, and turns depression into prosperity - inflation free by keeping credit and productive investment in balance. Whenever and wherever it's been tried, it worked when done right.
Instead, sweeping austerity measures are dictated for America and Europe. Last spring, an EU summit announced a Greece bailout package, dependent on "budgetary discipline" and imposed poverty, the same IMF prescription for Latvia, Iceland, Hungary, Romania, and Ukraine. Now eurozone shock therapy, what economist Michael Hudson calls a:
"neoliberal experiment....to drastically change the laws and structure of how European society will function for the next generation. If (successful, they'll) break up Europe, destroy the internal market, and render that continent a backwater."
Calling it a "financial coup d'etat," he said "bankers are demanding (and getting governments to) rebuild their loan reserves at labor's expense," Washington using the same ugly scheme.
Throughout the West, neoliberals are empowered. "From Brussels to Latvia, (they) aim to shrink their economies (by) roll(ing) back wage levels by 30 percent or more - depression-style levels," making Europe and America banana republics.
In late September, EU countries, led by Germany, increased pressure on member states to cut deficits by lower public spending, Chancellor Angela Merkel, in fact, demanding sanctions on offenders and suspending their voting rights for continued policy breaches. At the same time, corporate taxes have been cut, continuing a burden shift to workers. Since 2000, 12 of the 27 EU countries raised VAT rates, Hungary, Denmark and Sweden now charging 25% for commodity purchases while wages and benefits are being slashed. Some new world.
Across the continent, painful worker hammering continues, Ireland the latest troubled country making headlines. On November 13, Wall Street Journal writers Neil Shah and Marcus Walker wrote: "Ireland Stirs Specter of EU Default," saying:
"Europe's debt crisis is still smoldering (months) after relative calm," showing it deceptively hid big trouble, awaiting its moment to surface. The challenges facing Ireland "show few signs of abating soon," a worrisome contagion affecting Europe's largest economies, leading analysts to wonder what shoe will drop next.
Workers, of course, are most affected, spending cuts and high unemployment taking a punishing toll. More are coming, assuring greater deprivation and added impetus for increased emigration. Monthly, 1,250 students leave Ireland as well as thousands of young workers, seeing no future at home. Those remaining face growing burdens, including homeowners to avoid forclosure. One in eight mortgages is underwater. The worst is yet to come, and similar trouble affects Greece, Italy, Spain, Portugal, Britain, and elsewhere across the continent, yet policy fixes assure worse ahead, not better.
Also in America, planned austerity the wrong solution for a sick economy, yet bipartisan support and two deficit cutting commissions back it. An earlier article explained, accessed through the following link:
http://sjlendman.blogspot.com/2010/11/obama-teams-deficit-cutting-propos...
It covered Obama's proposed social spending cuts, while leaving defense, banker bailouts, and other corporate subsidies intact, a prescription from hell promising harder than ever hard times for millions. On November 10, Obama's deficit cutting commission outlined its plan. The above link discussed it, a thinly veiled scheme to serve capital, not people when they most need it.
The Bipartisan Policy Center (BPC) was also mentioned, a lesser known group for the same purpose, its proposal imminent at the time. Now it's out with draconian measures as destructive as Obama's commission - proposing Social Security, Medicare, Medicaid, and other social benefit cuts, harming working households most, the way elitists always cheat ordinary people for themselves.
Co-chaired by former Senator Pete Domenici and Alice Rivlin, former director of the Office of Management and Budget and the Congressional Budget Office, it's called "Restoring America's Future," saying:
America "fac(es) two huge challenges that can only be surmounted" by bipartisan support "to curb the mounting debt (to) reinforce recovery, not impede it."
Typical elitist boilerplate, then proposing punishing measures on working households for greater enrichment for themselves. They include:
-- indexing Social Security benefits to life expectancy to reduce benefits as longevity increases; in other words, "incentiviz(ing) people to work longer to compensate for lower benefits;
-- eliminating annual cost of living adjustments (COLAs), justified by claiming inflation is overstated when, in fact, it's higher, especially for retirees facing costly medical expenses;
-- over the next 38 years, "rais(ing) the amount of wages subject to payroll taxes (now capped at $106,800) to cover 90% of all wages" - suggesting bonuses, capital gains, dividends, and other executive compensation be exempt, for many, the lion's share of their earnings;
-- instituting a one-year payroll tax holiday for workers and employers, Social Security to get no funding for 12 months to save an estimated $650 billion; supposedly, future general revenue will replenish the shortfall;
-- cutting Medicare benefits, including by higher Part B premiums (from 25 to 35% of total program costs), co-pays, and fees for outpatients services; also establishing privately owned, lower-cost, health insurance exchanges to be given competitive cost advantages over Medicare - a de facto Trojan horse to replace it eventually, leaving recipients at the mercy of predatory insurers that profit by denying expensive care;
-- by 2018, cutting Medicaid by the amount it grows faster than GDP, providing less care to the indigent, perhaps eventually none;
-- shielding insurers and drug giants from malpractice lawsuits by making it harder to file them; then capping non-economic and punitive damage awards, suits to be adjudicated in "specialized malpractice courts," that may, in fact, be civilian equivalents of military commissions, used to deny so-called "terrorists" due process and judicial fairness;
-- instituting a 6.5% national sales tax (called a Debt Reduction Sales Tax - DRST); like European VATs (value added taxes), they'll hit ordinary people hardest and can be incrementally raised anytime to hit harder;
-- simplifying the tax code to two brackets (15 and 27%), favoring the rich; regressively cutting the top personal and corporate tax rate from 35% to 27%, claiming it "will make the tax system more progressive;"
-- eliminating home mortgage and most other deductions and credits;
-- taxing employer provided health insurance to encourage less comprehensive coverage and make healthcare cost more;
-- freezing non-defense discretionary spending for four years, then capping it according to GDP growth - a prescription to slash social benefits, perhaps eliminating them later;
-- freezing "discretionary" defense spending for five years, then capping it with GDP growth; doing it, among other ways, by "reforming military health care;" in other words, cutting veterans' (and perhaps active duty forces') health benefits; and
-- various other schemes hitting working households hardest.
BPC said "19 Americans (elitist ones) from across the country, with diverse backgrounds and views, examined a broad range of spending and revenue options for the federal government....We believe (their plan) provides a comprehensive, viable path to restore our economy and build a strong America for future generations and for those around the world who look to the United States for leadership and hope."
More boilerplate, disguising a scheme to enrich the few while denying equal opportunity to growing millions, especially the poor, disadvantaged, needy dependents, disabled and retirees, leaving them more than ever on their own and out of luck, the "future America" none of them want or deserve.
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