Richard Wolff: The great austerity shell game....Here's how the capitalist scam works:

[marmar]

The great austerity shell game
Here's how the capitalist scam works: let government borrow for crisis bailouts, then insist cuts pay for them. Guess who loses

Richard Wolff
theguardian.com, Monday 4 November 2013 08.00 EST


Center-right governments in Britain and Germany do it. So do the center-left governments in France and Italy. Obama and the Republicans do it, too. They all impose "austerity" programs on their economies as necessary to exit the crisis afflicting them all since 2007. Politicians and economists impose austerity now much as doctors once stuck mustard plasters on the skins of the sick.

Austerity policies presume that the chief economic problems today are government budget deficits that increase national debts. Austerity policies solve those problems mainly by cutting government spending, and secondarily, by limited tax increases. Reducing expenditures while raising revenues does cut governments' deficits and their needs to borrow.

National debts grow less or drop depending on how much each government's expenditures decrease and its taxes increase. Obama's austerity policies during 2013 started 1 January, when he raised payroll taxes on everyone's annual incomes up to $113,700. Then, on 1 March, the "sequester" lowered federal expenditures. Thus, 2013's US deficit will drop sharply from 2012's.

Obama will likely impose more austerity: cutting social security and Medicare benefits to compromise with Republicans. Similarly, European governments maintain their "austerity" programs. Even France's government, officially "anti-austerity" and "socialist", has a new budget with typical austerity cuts in social expenditures. .....................(more)

The complete piece is at: http://www.theguardian.com/commentisfree/2013/nov/04/great-austerity-shell-game

[BlueStreak]

1. Please tell me when, in the entire history of modern economics

has austerity worked to quickly move an economy out of recession.

Please give me just one example. Any country. Any decade. Just one example.

Why does the media (present article excepted) largely continue to report on austerity as if it were a legitimate solution for anything?

[truedelphi]

2. The media is merely the propaganda chamber for the One Percent.

Look at how all the Main$tream media bought into the "Weapons of Mass Destruction" lies being spun by Cheney/Bush. Not one reporter n any o f the main TV affilaites said, "What if this is a bunch of hooey."

[jmowreader]

3. The thing is, it's not SUPPOSED to work. It's SUPPOSED to make things worse!

Which makes no sense until you remember it's easier to make money in a down economy than a strong one...buy assets cheap from desperate people, then sell at a profit. Anyone want to guess why there are so many scrap gold buyers?

[bemildred]

4. +1. Precisely. nt

[BlueStreak]

6. 8% is the ideal unemployment rate

That means that there are enough people employed to keep society from melting down, but you don't have to take any guff from workers or unions. An 8% unemployment rate gives you enough consumers willing to put themselves in hock to buy what you want to sell them. It is exactly where Cheap Labor Republicans {tm} want to be. They most certainly don't ever want to see 5% again. That was a nightmare.

[gollygee]

8. And you don't have to treat workers well

when there's a high unemployment rate. They're easily replaceable.

[socialist_n_TN]

9. Marx called it the Surplus Army of Labor....

just saying, this has been known about for a while now.

[xchrom]

5. du rec.

[Quantess]

7. K & R