In the article Professor Robin Hahnel argues very strongly for a major stimulus package in spite of the deficit spending and huge national debt that it accumulates.
Please read this article.
Z Net: A Guide through the Economic Crisis
The principal causes of the “perfect economic storm” that broke in the fall of 2008 were (1) the dramatic increases in economic inequality which made the system less stable as well as less fair, and (2) the reckless deregulation of the financial sector. Both trends began in earnest with President Reagan in 1980, continued under Bush I and Clinton, and accelerated during Bush II. These trends were the result of a steady increase in corporate power, and the power of mega financial corporations in particular, and a dramatic decrease in the countervailing power of workers, consumers, and governments.
1. Large inequalities of income and wealth are not only unfair, they also increase the likelihood of economic crises for the simple reason that more of the income of the wealthy is not automatically turned into consumption demand. The poorer you are the more likely you are to spend what little income you have relatively quickly, and thereby provide adequate demand for all that was produced. The richer you are the more likely you are not to consume all your income. Unless the savings of the wealthy are successfully channeled into spending on goods and services by someone else, the demand for goods in general will fall short of the supply. When this happens businesses unable to sell all they are producing cut back on production and lay off workers, which of course, further aggravates the problem. This self-reinforcing, downward spiral is what we are now experiencing, more strongly than at any time since the Great Depression eighty years ago.
For now the only way to stem the downward recessionary spiral is for government to spend more than it collects in taxes – a lot more!
Yes, this means we need a big government budget deficit right now. Bigger deficit now…. Good. Smaller deficit now…. Bad.
Republicans raise concerns about fiscal deficits for opportunistic reasons. They showed no concern over massive deficits caused by tax cuts for the wealthy and increases in military spending and corporate welfare during the Bush Presidency—even when the economy was not in dire need of fiscal stimulus. Clearly they are hypocrites to raise deficits as a reason we cannot afford a massive fiscal stimulus now when the economy desperately needs one.
The many Liberals and ordinary people who express and support concern over budget deficits badly mistake their own as well as the national interest and fall into the Republican trap by doing so.
6 comments:
But that's exactly what Obama is now doing falling into a trap. Either he's really not that bright or he's being given really bad advice. The recession might be over for the top 1% but its deepening daily for just about everyone else. As I drive about everywhere I see strip malls dying as half or more of their businesses close. The only kinds of businesses surviving are Drs. and big Corp. outlets. Just about everyone else that is still standing is suffering. The problem is Larry Summer s and Tim ONLY care about their financier buddies on Wall st. They don't care about the rest of us because they see the rest of the planet as their main st. not America.
We look through tons of articles all the time. Here's what I think is missing.
You have two economies main st and wall st. The politicians talk about either one or both using the same terms. Some politicians and groups think one part is most important to the detriment of the other. The problem is whether we like it or not and I know you know this, but they are linked. The problem is this. We don't really know exactly how they are linked. Okay, well at least I don't know how they are linked. If corporate America fails can main st America survive. Right now main street is failing and corporate America is progressing with a lot of taxpayer money. As corporate America recovers from basically their own hubris, main street America is starting to slowly come out of shell shock and go back to America's favorite hobby which is buying. Now where I live, its still relatively stable, there are pockets in this area where there are visible signs of severe deterioration. We drove through the ghetto last week and in the mid 80s this huge long block was rehabbed. Now its back to boarded up buildings maybe every 1 in 8 and the ones in between are falling down. You know looking pretty bad but still inhabited. The tatters are there. The surrounding suburbs are still fine, and that's mostly white and professional or deeper families living from generational wealth.
The fringe people on the blue collar side of things with less education have even less opportunity right now and they drift towards, vagrancy, crime, drugs, early death, prison, the worst end of America. So main street is eroding. We know this and we know that the politicians are saying crazy shit right now because of it, Things like blacks had it better under slavery, completely crazy bat shit things, that they say publicly. So this is how they deal with the erosion of main street, they heap the blame on the poor and suffering themselves. Its a classic fascist technique, classic.
The thing is we have to have corporate America right now. Main street is too linked. How its linked is not clear in detail at least in my mind, yet. How else does this monstrosity move?
The BIG Corps. is only as linked as they need to be. Think of it like this. Corp. sees the whole world as one thing, except for those areas that keep them out. Those areas are considered hostile or partners( the Chinese and Indians as examples of the later) here in America we are no more or less then another occupied Corp. area no different then any other they OWN lock stock and barrel. They need the huge military to smash and grab or frighten into submission what they can't immediately take. It's called Imperialism and it's not much different then the Imperialisms of the past except it's not necessarily Nat'l in it's MO. It's also not centrally controlled really. It's more like a confederation of Nobles kind of. Each CEO is the temp. head of a small Corp. nation. No borders for these boys thats why they like so called free trade for themselves. Free trade allows them to destroy Unions and get around environmental laws, labor laws etc etc. Call it neo-liberalism call it neo-conservatism call it neo-fascism call it neo-feudalism whatever, it has elements of all these systems yet is something quite new. For one thing it's all linked now by massive Communication and data links and this has changed the way business is done. It can be done and is done virtually whenever possible. This has allowed manufacturing to be done in one place ( China) and the bookkeeping for it in India and the assembly in the US etc. So the Pres. of a State like the US is just another manager in a way. He has power to effect Corps. in his region but not beyond it in many cases and this limits his authority. A Corp. Ceo on the other hand isn't as constrained in many ways . He can make and break deals all over the Planet in a nanosecond and does. So Main street USA is just another piece of ground in the Global Corp. puzzle. Those who have skills that are transportable are in the best place leverage wise in this system, the rest need a skill the Corps. must have for the moment and its always momentary with these orgs. or one must have a political link in a State system. The rest are on their own and this is a cruel world if your in that category today. cont. in next post..
I think Unemployment is the way the system off loads its pain. The neo-liberal philosophy believes you give to the rich and let the weak die off. It's Darwinian @ it's core. It's against a safety net as well. Why do u think Obama wants a so called deficit Commission? He and the Corporatist elite in BOTH so called parties wants to END not cut END all entitlement programs eventually. They don't believe they are necessary nor are they sustainable over the long haul. What will happen to the millions without work? They will be either put in prisons or work camps in the future. being without work will become a crime in the future just like being with PRIVATE HEALTH CARE will be made a crime soon. ( The so called FORCED MANDATE is an example of the kinds of new laws coming. The Constitution has been for all practical uses superseded now and the recent SCOTUS ruling sealed the deal for total or near total Corp. control of a Corp. state. It's Mussolinis dream on a massive Int'l scale. Now it's got lots of players yet in this game so its by no means over. The Chinese Leninist faction are a real problem and so are others out here but the neos are dealing with these forces and its in all their interests to tamp down slave revolts like the terrorist gangs that roam around and also regional attempts at power. This si the "new" world we live in it's multi-polar now no longer is it bi-polar as it once was during the Cold War. The US right now plays the role as world cop whether that will continue is debatable because if our economy continues to weaken who knows? On the other hand HIGH unemployment as we've seen fill the ranks of the new Private armies and militias with millions of raw recruits ready to KILL the designated enemy. They have no factory jobs do they anymore so being hired killers is the new job. You see the ads all over Cable and they are so slick aren't they.
Well GK thanks for taking the time to write out some details here. Its a nightmarish scenario. Somehow we have to maintain our firmness about this corporate economy. There's a lot of people out there, and it represents a lot of power. The corporate world does its damnedest to confuse and beguile people, plus there are these central convictions good and bad that people maintain that are used to corporate advantage. We just have to keep plugging away.
Your welcome. It's just a sketch of what I see. No real conspiracy out here it's chaos and the better a group or groups are organized the more they can bite off of the collective wealth of the planet. The neo-cons wanted to do it with guns and force the neo-liberals with talk, carrots and then guns. Either way they're both into getting it one way or another. Obama is just a smiley face on this beast.
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