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|Imajika (1000+ posts) Send PM | Profile | Ignore||Sun May-30-10 06:51 PM
Response to Reply #16
|18. You know, I agree with much of what you say here...|
...and I certainly appreciate your taking the time to respond.
Still, you keep excusing the people for their votes or lack of votes. You make it sound as if this recession is the only reason Europe and the US have massive deficits and debt. For the most part, we have been overspending for years and years and years. Rather than make the tough decisions such as cuts or increased taxes, we just let most everyone have their spending priorities and don't balance the budget. That really is exactly what I said previously - it would be like if me and my family could not decide how to balance our budget so we just kept maxing out credit cards to buy everything everyone wants. We'll only be able to move money around so long till it catches up to us, and then we are going to have to deal with all sorts of crap like higher interest rates, lower credit limits, collection calls, etc.
There is simply no excusing people from consistently voting for politicians who spend far more than we take in. Unfortunately, this layer of politicians appears to make people feel as if they are not to blame because they are not making the budgetary decisions themselves. It is very much like the people that rail at Supreme Court decisions, yet have no idea how those justices got in there and fail to realize their votes for President and Senate directly impacts who is making those decisions. You and I may blame an insufficiently progressive system of taxation for some/much of the debt problem, but a majority of people in the US and throughout Europe are voting in a way that causes budgets to be way out of balance. I also agree with the general thrust of your post about international financiers (banksters) gaming the system and creating a win/win for themselves. I certainly agree that there is this sort of bloodsucking elite that is feeding off the system to the tune of billions upon billions of dollars without creating or really doing anything much of value.
On a side note, this is something I think people finally sense but can not quite put their finger on. It is one reason people are generally angry. They know there is this class of "not what you know, rather who you know" people that are nothing more than fat parasites eating away at the system.
But I must go back to my main point. The lesson here is do NOT go into debt. Democracies generally have the mechanisms to allow the people to put responsible people into office, the problem is the people simply haven't been doing so. As just an example, most Americans don't even know what a primary election is let alone vote in one.
"How is it possible that every country is individually responsible for what is obviously a world crisis happening in many countries at the same time?"
The same way so many Americans got into so much debt? People got used to the idea they could just keep borrowing and borrowing for so long, they forgot what it even means to live within their means. No different than many (not all) of the people buying real estate just assumed the market would go up forever. It didn't matter that they couldn't really afford it, just use credit cards to get by and in 6 months my new home will be worth 10% more and they can turn it over or get equity loans and roll it all up.
"And why do you think it should be the financial markets who judge the responsible from the irresponsible? Who voted for them?"
I didn't vote for convenience stores either. They are a byproduct of our free market system. You don't need to participate in high finance. You can put your money in the most basic bank account and do just fine. No one needs to borrow a crap load of money. In fact, getting back to saving up for the things we want is probably far better (and safer) anyway.
"The people who get hit by austerity generally are the ones who already were scraping to get by and doing their best to live within their means."
Okay, so they were barely scraping by receiving money from the government right? If austerity affects them this drastically, they are probably receiving benefit cuts. How is this any different from the employees in the private sector (the vast majority) getting pay cuts or laid off and curtailing their donations to charitable causes. The recipients of those charities are hurt right? Sorry to say, but this kind of "trickle down" is simply unavoidable - at least to some extent. You and I would argue there is still plenty of money to keep these programs going by taxing the wealthy more, but if the majority of our fellow citizens won't vote for politicians that will collect the appropriate level of taxes then we are right back to square one. Caring people make their arguments to assist the vulnerable, right wingers argue for more defense spending and whatever else they think are priorities, no tough decisions are made, and we end up recklessly spending on everything. This has been the pattern for a long time.
"You can say they needed a lot of suckers, so it's the suckers' fault, but there is no excuse for fraud. Fraud is still crime. Transactions must be based on truthful accountings, or civilization is itself a fraud."
I have no problem with this point. Fraud should be prosecuted where it can be proven laws were violated. I just have this sense that the term "bankster" has come to basically mean "anyone who works for a financial institution that we don't like".
"They're in charge -- not the elected governments."
They end up with the upper hand when elected governments take on a lot of debt - no different than the local banks credit department can start dictating terms to you if you run up your credit cards. Also, through regulation government should never allow "too big too fail". Again though, this is the responsibility of voters in a democracy. Also, I wouldn't have bailed them out at all anyway.
"And 'we' did not all participate equally in the private economy, as you seem to think we participate equally in government because we all have one vote. The economy is very much directed by the rich, the banks and the big corporations."
This is an extremely thoughtful point. I will have to really think on that because it has very big ramifications.
"Governments must spend when the private sector fails. That's the only way that recovery comes. You seem not to see what the Great Depression taught."
That is a very strong statement. I do not think this is true. There is no doubt that stimulus spending can kickstart an economy, but your dismissing the business cycle and the private sector's ability to recover on its own. You may not want to wait for a recovery, but I do not think history shows the government always has to spend in order to pull out of a downturn. The Great Depression is not a singular lesson for all recessions/depressions. Further, there is quite a lot of debate about this. WW2 is what many really believe got us out of the Depression, and that involves a lot more than spending. Your talking about a national mobilization that allows the government to pull young men and women off the streets which effectively wipes out unemployment, pay them dirt cheap and send them off to fight. Additionally, the government is giving extraordinary powers during war time that I seriously don't think we'd want to grant each time we suffered a severe downturn.
"The government owes a great deal of money that it did not actually borrow."
I will read this more closely, but I'd assume this is debt servicing. No insanely high national debt, no problems with debt servicing.
"After the most recent failure of this in the US, governments here and elsewhere, including Spain, took on many 'toxic assets' - the failed debt created by the financial sector - so as to rescue the financial sector."
This is thorny. We purchased the "toxic assets" from the very same financial network we borrow money from. My feeling was - let them fail. I do not really believe the whole Western world as we know it would have collapsed. A simple "we don't have the money to bail out the likes of JP Morgan" would have sufficed. Other companies would have bought up the pieces and a lesson would have been learned. What we did has not deterred "too big to fail". Instead, we institutionalized it.
"People obviously didn't vote for that. In the US, they rose up against the bailout, but Congress succumbed instead to the carrot and stick of the Treasury Department and the financial sector."
No, see, that is where your off the mark in my opinion. The people didn't rise up at all. Not even a little. What the people did was expressed their displeasure to pollsters. There is no evidence they will vote any different. It is the responsibly of a democratic society to actually make their votes count. The fact that half the people don't bother to get involved is essentially a nod of consent to the current governance.
"A great deal of US debt is due to wars. You may say people voted for that, but this ignores the reality that they don't get a choice."
If people really don't want a war, they will not vote for politicians that support it. The issues here is that a majority of the people in this country have no problem with wars - and are willing to vote for politicians that march off to battle for dubious causes and don't pay for it. There is simply no excuse here in my opinion. We may wish it to be otherwise, but a majority of our fellow citizens are okay with the status quo where that is concerned.
"The situation in Spain today will be the situation in the United States this winter. You can bank on that. Perhaps before, but definitely after the election, you will see overwhelming calls for austerity and pressure from the markets to enact it."
I do agree here. My answer is some relatively simple social security fixes (tax all income, not just that under 100k), dramatically raise top bracket rates (and make sure we are hitting personal take home pay), etc, etc. Still, it is the responsibility of society to spend only what we take in. We should fight for the things we believe in, but we can not continue burying ourselves in debt because one side or the other can't get their way. Our movement should be for reform, balanced budgets, elimination of debt, increased taxes on the wealthy, etc. There is simply no excuse for taking on so much debt and becoming beholden to creditors - especially not in a nation as rich as we are.
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